Kolkata: The Centre is planning to further reduce its stake in the world’s largest coal miner, Coal India Ltd. (CIL) by 10 percent and hopes to raise funds in the range of Rs.23,000 crore-Rs.24,000 crore by means of stock market auction.

“The government of India intends to disinvest 10 percent paid-up equity capital (63,16,36,440 shares each of face value Re.10) of CIL out of its shareholding of 78.65 percent through offer for sale of shares (OFS) by promoters through stock exchanges method as per the Securities and Exchange Board of India rules and regulations,” a notice from the department of disinvestment said.

The Centre has sought bids from merchant banks and selling brokers to take the process forward and will be selecting five such banks or brokers to manage the issue. The deadline for the application is September 2, 2015.

The government in this process is also considering allotting shares to eligible and willing employees of CIL at a discount upto five percent to the issue upto a maximum of five percent of the OFS’s size.

“The employees will be eligible to apply for shares up to Rs.2 lakh only,” the notice said.

As per the proposal from the disinvestment department, the authorised capital of CIL stands at Rs.8,904.18 crore which comprises of a Rs.904.18 crore non-cumulative 10 percent redeemable preference shares and Rs.8,000 crore equity shares. The subscribed equity capital as on March 31, 2014 stands at Rs.6,316.36 crore.

“As on July 27, 2015, it (CIL) is fourth largest company in terms of market capitalisation, with market value of Rs.2,67,782.27 crore.”

During January-end this year, the government sold a 10 percent stake in CIL which fetched Rs.22,557 crore.

CIL officials said this move may trigger a protest from the company and its subsidiaries’ trade unions.