Share of Coal India have slipped below the 300 mark and are trading down 3.5% at Rs. 299 a piece, when the broader markets are down a little over a percent.

Government of India, which holds 90% stake in the company, is likely to launch a 5% further public offer (FPO) by first/second week of December, days before the company union goes on three-day strike, beginning 17^th December. The FPO will be discussed at the company’s board meeting next week. Company union has managed to lower the FPO size from 10% to 5% and are further hard negotiating to stall the stake sale.  

Seven merchant bankers have already been selected for the FPO via the offer-for-sale route through the stock exchanges of Rs. 31.58 crore shares, which will garner close to Rs. 9,475 crore (at current price of Rs. 300 per share) to help meet FY14 divestment target of Rs. 40,000 crore.

In October 2010, Government had raise about Rs. 15,500 crore by divesting 10% stake in India’s largest coal miner at Rs. 245 per share (with 5% discount for employees and retail investors). This time, 10% of the book is likely to be reserved for employees with 5% discount on the sale.