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CIL OFS largest, may fetch Rs 25,400 cr: Divestment Secy

In a big boost to Narendra Modi government’s divestment drive, the 10 percent stake sale in Coal India today got over subscribed by 1.1 times and fetched about Rs 22,600 crore, while the retail portion was under-subscribed.

Speaking exclusively to CNBC-TV18’s Sapna Das, divestment secretary Aradhana Johri said the Coal India offer-for-sale (OFS) is the biggest public issue of all time. She suggested the government will soon decide on retaining green-shoe option. 

This is also the biggest ever share sale by any private or public sector company in India and exceeds the previous record of over Rs 15,000 crore made by Coal India itself in 2010.

According to Johri, the government is likely to garner close to Rs 25,400 crore from the Coal India OFS. The divestment witnessed huge participation by foreign investors, who are expected to have pumped in around Rs 5,400 crore.

The finance ministry has indicated there will be plenty of divestment activity before the end of this fiscal, Johri concluded.  

Below is verbatim transcript of the interview:

Q: What is your first take on the fact that this issue has now almost garnered more revenue than what government has been able to earn on any of the issues in any of the financial years in the past. Around Rs 24,000 crore is what we understand you have garnered?

A: Yes, this is certainly the biggest issue of all times. It is not only the largest single issue but is also equal to the highest collections for the whole year of the highest of any year in the past.

It is a matter of great satisfaction, it speaks of the investment climate in the country and the fact that people are looking at the economy of India, people are looking at India as an investment destination.

I am very happy that we have got a lot of foreign institutional investor (FII) participation, the figures are still being crunched out by the stock exchanges but it is approximately Rs 5,400 crore which is again the highest FII participation of any issue at all and in an OFS which is a single day it speaks a lot of the investment climate in India.

Q: How much have you actually been able to rake in? I just mentioned Rs 24,000 crore odd. Would we be somewhere near that and if you put the sale numbers together, what is the total approximation that we are sitting at for this financial?

A: Once again, the numbers are being crunched out by the stock exchanges. It is just a broad figure they have given us and they are doing the reconciliations. But we should have collected around Rs 25,400 crore approximately which is again the highest of any year so far.

Q: You have given us some indication on the FII numbers. What about the bids from the Public Sector Undertakings (PSUs), were they also equally high or what was their participation like and how much did Life Insurance Corporation (LIC) bid? Could you give us a brief break up at this stage if possible? We do understand the exchanges are still collating the numbers?

A: Yes, we don’t have that break up as such but approximately the largest insurer would be somewhere around 40 to 50 percent of the size. But once again, were I to take that out, then something like Rs 12,000 crore or Rs 13,000 crore non LIC sort of a collection is a huge collection because it is big, that would be equal to possibly one of the biggest issues itself.

If you look in absolute numbers the FII participation, even the retail is around Rs 1,900 crore plus which is well over 85 percent of the 5 percent retail target that was there. So, all these numbers add up and the real volume, the size of the whole issue shows that a lot of investment is coming to India.

Q: It is very likely that the government is now going to retain the 5 percent green-shoe option which came in for more than Rs 66 crore share. When is this decision likely?

A: Just to put it in perspective we had indicated that we would be selling 5 percent of the equity which would be approximately 32 crore shares and with the option of retaining the surplus which would approximately come down to about Rs 22,000 crore and we have collected over and above that.

Formally, we are yet to receive the offer from the stock exchanges and so, formal decision will be taken thereafter.

Q: Going forward, do you expect more in current financial?

A: The finance minister has already indicated that you would see a lot of activity in this period. We have been trying to build a pipeline rather than just have selected stocks and go and look at other approvals.

We have a larger basket to take off from and we look at the market and then take a call. So, it has been a lot of hard work putting this pipeline in place and yes, you can expect a lot of activity.

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