Coal India (CIL), world's largest coal miner, has hit a "green" hurdle, prompting its largest stakeholder, the government of India, to extend for the third time the deadline to appoint merchant bankers in its efforts to sell a 10% stake for about Rs 21,000 crore ($3.3 billion).
Merchant bankers have stayed away from taking up the stake sale process, citing a deficiency in CIL's environment sustainability commitments.
The government wants to appoint about five merchant bankers to oversee the stake sale.
"CIL has some sustainability plans that CIL committed in 2013. They have not been able to implement it. The foreign bankers have expressed concerns on that," a senior government official told PTI.
The Department of Disinvestment (DoD) has arranged meetings between the merchant bankers and CIL representatives to expedite addressing concerns raised over CIL's environment's sustainability commitments.
"Coal India is a stock everybody wants to get hands on. The stock is also trading low and is easy to sell. At the current trading price, the scrip is a hot cake," the official added.
The DoD has now extended the last date for merchant bankers to 10 November to submit their bids for the mega stake sale.
The government owns 78.65% stake in Coal India; the 10% stake sale is expected to fetch nearly Rs 21,000 crore at current market prices.
So far this year, the government has raised Rs 12,600 crore by selling its stake in four public sector undertakings (PSUs) as against the disinvestment target of Rs 41,000 crore set for 2015-16.
CIL stake sale would enable the government to raise more than three-fourths of the amount targeted from disinvestment.
Coal India was the second highest dividend payer in the country for the year ending March 2015, next to India's largest software firm Tata Consultancy Services (TCS).