State-run Shipping Corp. of India is likely to raise up to $259 million through a share sale after the company set the indicative price band at a 7 percent discount at the low end of the range.

The follow-on issue, which opened on Tuesday and closes on Jan. 8, will offer a 5 percent discount to retail investors on the final share sale price, sources with direct knowledge of the matter told Reuters.

The government will sell a 10 percent stake in the shipping services firm and the company will issue another 10 percent of fresh equity.

Shipping Corp has fixed the indicative price band for the share sale at 135 rupees to 140 rupees a share, the company said.

Last month, Coal India’s record $3.4 billion initial public offering was about 15 times subscribed, while Power Grid Corp $1.7 billion share sale at the top of its indicated range after the offer was nearly 15 times covered.

The government plans to raise $8.6 billion through stake sales in the fiscal year that ends in March 2014.

Shipping Corp plans to use the proceeds from the share sale to fund acquisition of nine vessels, of which it will place orders for two very large crude carriers and three containers soon, its Chairman Sabyasachi Hajara said earlier this month.

Indian investment banks SBI Capital, ICICI Securities and IDFC Capital are the lead managers for the Shipping Corp offer.