Government Seeks to Raise Up to ₹5,000 Crore from Coal India Stake Sale

Government Aims to Collect ₹5,000 Crore from Coal India Disinvestment

The Indian government is set to sell up to 1% of its equity stake in state-run Coal India Ltd (CIL), with a green shoe option to sell an additional 1% if investor demand is higher than expected. This move is aimed at meeting the disinvestment and asset monetisation target of ₹80,000 crore for the current financial year (FY27).

The floor price for the offer for sale (OFS) has been set at ₹412 per share, and at this price, the government is expected to mobilise over ₹2,500 crore through the base 1% stake sale. However, if the additional green shoe option is fully exercised, the proceeds could cross ₹5,000 crore.

The OFS, which is part of the government's broader disinvestment and public shareholding strategy, is expected to open for non-retail investors on 27 May and for retail investors on 29 May. The government currently holds 3.89 billion shares in Coal India, representing a 63.13% stake in the company, valued at around ₹1.78 trillion.

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The CIL share sale assumes significance as the government has accelerated efforts to raise non-tax revenue through stake sales and asset monetisation amid rising expenditure commitments and infrastructure spending plans. Coal India remains a key revenue-generating PSU for the government through dividends and taxes, accounting for over 80% of domestic coal production.

The government has increasingly relied on minority stake sales in listed public sector enterprises to meet disinvestment targets after several large strategic sale proposals faced delays. The Coal India OFS comes days after the government launched an OFS in Central Bank of India, which was subscribed 2.35 times on the first day after opening for institutional investors on 22 May.

Government's Disinvestment and Asset Monetisation Targets

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The government has set an ambitious disinvestment and asset monetisation target of ₹80,000 crore for FY27, following a successful disinvestment drive in the previous fiscal year. In FY26, the government garnered ₹16,885.56 crore from disinvestment, compared with ₹10,163.02 crore in the previous fiscal year. Besides disinvestment receipts, ₹28,420.49 crore was raised through asset monetisation in FY26, marking a significant increase from the previous year.

Major transactions, including those of IDBI Bank and Life Insurance Corporation of India (LIC), are expected to support revenue mobilisation during the year. The government holds 89.27% stake in Central Bank of India and is expected to dilute its holding further following the exercise of the green shoe option in the ongoing OFS.