New Delhi: The planned initial public offering by Coal India, the world's largest producer, may be delayed at least two months to September, sources said.
The state-run producer has yet to secure final government approval for the offer, said the sources, who declined to be identified.
Coal India planned to raise as much as Rs130 billion (Dh10.2 billion) in a share sale in July, two members of the government said in April.
At least 29 companies delayed or cancelled equity sales in May as Europe's debt crisis triggered the biggest decline in emerging-market stocks since October 2008.
India needed to complete sales including Engineers India Limited and Steel Authority of India Limited to raise a record Rs400 billion this year.
Difficult situation
"Fund managers across Europe and the US would be reluctant to allocate money because of the difficult market situation right now," said Taina Erajuuri, who helps manage the equivalent of $1.2 billion of emerging market stocks at Helsinki's Fim Asset Management.
"I would prefer to allocate money after September when it's clearer where the markets are headed."
Coal India intended to sell shares by July or the first week of August, Chairman Partha Bhattacharya said April 26. The planned sale would overtake Reliance Power Limited's Rs115.6 billion offering in January 2008 as India's biggest, according to data compiled by Bloomberg.
Coal India finance director A.K. Sinha couldn't be reached for comment at his office in Kolkata, where the company is based. Sidhartha Pradhan, official spokesman at the department of disinvestment, wasn't immediately available to comment when called at his office.
Citigroup, DSP Merrill Lynch and Company, Deutsche Bank AG, Morgan Stanley, Enam Securities and Kotak Mahindra Capital Company are likely to manage the share sale, two bankers familiar with the plan said in May.
The sale arrangers would be formally appointed at the same time that the cabinet approves the sale.
The government will then make a final decision on timing.
