The cabinet committee on economic affairs (CCEA) has approved the disinvestment of 10% paid-up equity capital in Coal India (CIL). Post stake sale, the Government of India's (GOI's) shareholding will reduce to 79.65% from current 89.65%.

Commenting on the stake sale, Nomura said,"If the issuance is at Rs 300-350 a share, GOI's gross receipt would be Rs189-221billion. If this consideration was to be recovered via a special dividend + dividend tax thereon, the required special dividend would be Rs 28-32.75 a share.

We maintain Buy on our FY16F normalized earnings, the stock trades at 10.8x P/E (EPS: Rs34.6) and 6.5x EV/EBITDA (12.8x P/E and 8.5x EV/EBTIDA on reported earnings)."

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