India to sell up to 10% of Coal India Ltd

India's national government intends to divest a minority stake in state-owned Coal India Ltd for around $8-10 billion. "The divestment of government equity up to 10% will take place later this year -- that is during fiscal 2010-11 in the capital market through the book-building process," Coal India chairman Partha S. Bhattacharyya told The Economic Times.

"A Shanghai-based listed Chinese coal mining firm, with which we are on par, has a market capitalisation of $100 billion. With a cash-flow of $1.24 billion and a strong bottomline, we should also command a higher market cap," he said.

It will be the first time the government will offload stake in the Kolkata-based firm that accounts for 85% of the country's total coal production of 493 Mt/y.

The enterprise will also issue shares to its 425,000 employees on pro-rata basis. With one of the largest number of employees in India's organised sector, eligibility for share allotment will be worked out proportionately.