India sells 10% stake in biggest coal producer

New Dehli - The Indian government sold a 10% stake in state-run Coal India on Friday in the biggest offering ever on the domestic equity market.

Shares of Coal India, the world's largest coal producer, were oversubscribed, the latest data on the Bombay Stock Exchange website showed. A total of 675.2 million shares were subscribed against the total 631.6 million shares on offer.

The sale is likely to add over $3.7bn to the government exchequer. The floor price was set at 358 rupees per share.

Following the sale lasting nearly seven hours, the government stake in Coal India will come down to 80%.

The strong response to the Coal India offer provides a boost to the government's divestment programme. It plans to offload shares in other state-run firms including the Oil Natural Gas Corporation.

The government has set a target of 430 billion rupees through divestment of state-run companies, aiming to narrow India's fiscal deficit to 4.1% of gross domestic product for the financial year ending March.

India is the world's third-largest coal producer and the government enjoys a near monopoly in the sector with Coal India accounting for 81% of the domestic production.