The Finance Ministry has invited bids for the appointment of lead managers for the proposed initial public offering of Coal India Ltd (CIL).
The bids will have to be submitted by May 3.
To facilitate the listing of CIL, a Navratna company, the Government is considering divestment of 10 per cent paid-up equity share capital of CIL through an IPO.
Staff quota
One per cent of this public offering would be reserved for the employees of CIL and its eight subsidiaries, the disinvestment department has said.
The Government intends to select and appoint six merchant bankers who will the book running lead managers(BRLMs).
The Government holds 100 per cent of the paid-up equity capital of CIL.
As on end March 2010, CIL had paid-up capital of Rs 6,316.36 crore.
Indications are that the Coal India public offering will hit the market in July or August.
The BRLMs will also be required to advise the Government on the timing and modalities of the IPO, ensure best return to the Government, underwrite the IPO and organise domestic and international road shows.
For being eligible to bid, a bidder should have handled at least one domestic equity issue of Rs 500 crore or more in the last three financial years.
The Union Cabinet is yet to give its nod for 10 per cent divestment in Coal India. At the time of conferring Navratna status to CIL in October 2008, the Government had asked CIL to list its shares within three years.
Qualified interested bidders would be required to make a presentation of their credentials before an inter-ministerial group (IMG) at New Delhi on May 5-6.
Selection
The IMG would evaluate the bidders based on their presentations and proposals.
The IMG would open the financial bids of only short listed bidders.
While the marks scored by the short-listed bidders in the technical bid will be given a weightage of 70, the financial bids will be given a weightage of 30.
The bidder scoring the highest points would be appointed.
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