New Delhi, June 6: In another bold move after last week’s fuel price hike, the UPA government is pushing for disinvestment in profit-making PSUs. In a recent letter, the Department of Disinvestment under Finance Minister P Chidambaram has asked the Coal Ministry to seriously consider selling 10 per cent stake in wholly state-owned Coal India Limited (CIL) through an initial public offer.

Coal India Ltd has a paid-up capital of Rs 6,316 crore and posted aggregate profits of Rs 9,576.22 crore in 2007-08, 12 per cent higher than the previous financial year. Besides detailed financial information on CIL, the Finance Ministry is understood have also sought the Coal Ministry’s assessment of the company’s valuation in today’s market condition.

The government had two years ago proposed a partial stake sale of five per cent in CIL through an initial public offer (IPO). The proposal, however, ran rough weather politically. The Finance Ministry has now asked the Coal Ministry to reconsider the IPO proposal.

The Coal Ministry, government sources said, was likely to seek a third party opinion on valuation. The IPO could be through a combination of issue of fresh shares and part sale of government equity, they added. Either way, Coal Ministry sources acknowledge the move will trigger angry reactions from its Left allies who consider coal-mining areas as their traditional strongholds.

CIL’s equity base comprises 63.16 million equity shares of Rs 1,000 each. The shares of Rs 1,000 face value are likely to be split to 100 shares with a face value of Rs 10 each before the IPO, the sources said. A 10 per cent IPO will help mobilise funds to the tune of more than Rs 7,000 crore. While the funds raised through fresh issue of shares would be used by CIL for its own expansion plans, that mopped up through sale of government equity would accrue to the government kitty.

The Coal Ministry, however, has taken no view of its own in the issue and would only do so after receiving inputs from the PSU. CIL itself had been toying with the idea of sending a proposal to the Government for enlisting it on the bourses albeit after securing the Navratna status. Arguing in favour of listing, CIL top brass said that every company wanted to have good market capitalisation.

The last time the UPA tried to push the disinvestment agenda through an IPO of Neyveli Lignite Corporation, it had to go back on a Cabinet decision since the alliance’s southern ally, the Dravida Munnetra Kazhagam, threatened to pull out.