Government of India approves disinvestment in Coal India and IPO of Cochin Shipyard

The Government of India restarted the disinvestment programme that was being put on hold because of weak market conditions. The Cabinet approved 10 percent disinvestment in Coal India the country's largest coal mining company and initial public offering of the Cochin Shipyard.

The Government is expecting around Rs.20,000 crores from its sale of stakes in Coal India. In the last financial year, the Government earned Rs. 22600 crores from 10 per cent disinvestment in Coal India. For this year the budgeted estimate by the government of disinvestment is Rs.69,500 crore. The Government has raised Rs.12,600 crores from the sale of stakes in four public sector firms.

The Government of India currently has 79.65 percent equity shareholding in the company while foreign institutional investors have 9.04 percent stake and domestic institutional investors 8.44 percent stake as of September 2015.

With this the Cabinet Committee on Economic Affairs also gave its nod to Cochin Shipyard for an IPO of shares. The IPO will consist of a fresh issue of 22,656,000 equity shares and sale of the government’s stake in CSL worth 11,328,000 equity shares of Rs 10, through a public offering in the domestic market. The fresh shares are being issued by CSL to partly finance its expansion, which includes setting up an international ship-repair facility at Cochin Port Trust area and establishing a large dry dock within the CSL premises to take up construction of larger ships such as aircraft carriers, as well as to undertake underwater repairs to rigs and semi- submersibles.

Coal India Limited (CIL) is an India-based holding company. The Company is engaged in the production and sale of coal. It operates through approximately 82 mining areas spread over eight provincial states of India. The Company has approximately 430 mines, in which 227 are underground, 175 are opencast and 28 are mixed mines.

CSL is one of the major shipbuilding and maintenance facilities in India. It is part of a line of maritime-related facilities in the port-city of Kochi in the state of Kerala, India. The services provided by the shipyard include building platform supply vessels and double-hulled oil tankers. Presently, it is building the first indigenous aircraft carrier for the Indian Navy.