Coal India to decide on anchor investor in two-three days

Kolkata, Aug 13 (IANS) State-owned Coal India Limited (CIL) will in the next two-three days decide on the anchor investors for its upcoming initial public offering (IPO) through which the government expects to raise up to Rs.15,000 crore.

‘It will be decided in two to three days,’ Coal Minister Sriprakash Jaiswal told reporters on the sidelines of a seminar here by Coal Consumers Association of India.

An anchor investor is one who buys shares of a company before the launch of the public issue.

According to the Securities and Exchange Board of India (SEBI) which approved the concept last year, anchor investors can be allocated as much as 30 per cent of the portion reserved for qualified institutional buyers.

According to the Draft Red Herring Prospectus (DRHP) filed with the SEBI, the country’s largest coal producer has offered 631,636,440 equity shares with a face value of Rs.10 each. The government is divesting 10 percent stake.

The IPO would open Oct 18 and close Oct 21.

The minister said there would not be much hurdle in clearing environmental issues.

‘I don’t think more than 10-15 percent of the area will be ‘no-go’ area,’ Jaiswal said.

The environment ministry has recently termed a large portion of coal bearing forests as ‘no-go’ areas where no mining activities can be pursued. This could impact valuation of Coal India’s IPO.

N.C. Jha, CIL Director (Technical), said the company would produce 460.5 million tonnes in 2010-11 against 431 million tonnes a year ago. The company has contracted to import 4.5 million tonnes against target of 8 million tonnes.

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