The government on Tuesday
gave a 7.7 per cent discount at market rate for sale of its
10 per cent stake in miner NMDC Ltd, with the hope of garnering Rs 5,828 crore to the cash-pressed Exchequer.
The
base price has been fixed at Rs 147 a share. The one-day stake sale opens on the bourses on Wednesday.
"The government of India has now informed the Exchange that the floor price for the sale shall be Rs 147 per equity share of NMDC," the state-run firm said in an exchange filing on the eve of share sale programme.
NMDC is the largest iron ore miner in the country.
The government, which has 90 per cent holding in NMDC, plans to divest 39,64,71,600 shares. The Cabinet Committee on Economic Affairs had on October 25 approved the disinvestment.
If fully-sold, it will get up to Rs 5,828 crore through offer for sale (OFS), the route followed in the Hindustan Copper share sale last month.
The NMDC issue will be the
second disinvestment in this financial year, for which the government has
set Rs 30,000 crore fund-raising target through share sales in at least a dozen firms.
The government had offered a 41 per cent discount to the investors in Hindustan Copper's issue, through which it had
generated Rs 808 crore.
Despite that, state-run financial institutions had to chip in at the last moment to save the issue.
NMDC share sale will take place on separate windows of the stock exchanges - BSE and NSE. It will start tomorrow at 9.15 am and close the same day at 3.30 pm.
The government is confident of smooth-sailing of the offer due to strong fundamentals of the Hyderabad-based company.
NMDC, which is sitting on a cash pile of over Rs 22,000 crore and commands around 41 per cent share in the domestic iron ore market, is also a debt-free company.
In the last financial year, NMDC had reported a net profit of Rs 7,265.39 crore and net sales of Rs 11,260.53 crore. However, in the June-September quarter, its net profit was down nearly 15 per cent at Rs 1,678.62 crore largely due to fall in sales and lower production.
NMDC's shares settled at Rs 159.30 apiece, up 2.94 per cent over the previous closing on the Bombay Stock Exchange. In the National Stock Exchange, shares closed at Rs 159.05 apiece, up 2.78 per cent.
The BSE Sensex closed down 0.12 per cent at 19,387.14.
With inputs from PTI
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