PSU fears employees could stay away

Coal India has apprehensions that the employees reservation portion of its net offer might be under subscribed.

Coal India (CIL) has apprehensions that the employees reservation portion of its net offer might be under subscribed. This could lead to increase in subscriptions from qualified institutional bidders (QIBs),retail individual and high net worth individual (HNI).

CIL chairman Partha S Bhattacharyya on Monday said since there has been resistance from the trade unions on the proposal of 10% dis-investment,participation of employees to the initial public offer (IPO) might not be at the desired level.

Application will fall short of the quota, Bhattacharyya said. However,Vikas Khattar,managing director,Citigroup Global

Markets India Pvt added that the balance offer of the employees reservation portion would go to the QIBs,RIBs and HNIs in the same ratio as that has been offered at present.

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Termed to be as one of the biggest IPO in the history of Indian capital market,CILs public offer is of 631,636,440 equity shares,of which 63,163,644 equity shares has been reserved for subscription by its employees. While 50% of the total offer has been allocated to the QIBs,35% has been to the RIBs and 15% to HNIs.

According to Bhattacharyya participation of employees was highly desirable since SEBI,in order to give all the CIL employees including the employees of its subsidiaries an opportunity to become the companys share holders,had given a special order in March,which says all employees of such companies,the accounts of which consolidates with the holding company,are eligible to buy shares issued by the holding company.

He said though three of the five trade unions after meeting the Union finance minister Pranab Mukherjee on April 30,conceded that the dis-investment should be given a safe passage,they have started protesting against it just prior to the launch of the IPO keeping the workers sentiment down. The trade unions have called further strikes,though earlier the unions relented with a days strike in May against a proposal of 3 days strike.