NMDC share sale fetches govt about Rs 6,000 cr

The NMDC issue was oversubscribed 1.73 times on Wednesday, fetching Rs 6,000 crore for the government for its 10 per cent stake, thanks to strong participation from FIIs and state-run insurer LIC.

The success of the issue, in which 68.69 crore bids were received, as against 39.65 crore on the block through the Offer for Sale (OFS) route till 1600 hrs - according to the stock exchange data - will pave the way for disinvestment of a clutch of other PSUs lined up.

"We have mopped up about Rs 6,000 crore from NMDC share sale. The average weighted price for the bids is Rs 150 per share," a top Finance Ministry official said.

The official said a bulk of the bids came from FIIs at an average price Rs 150 per share, while state-owned financial institutions including LIC took part in the bidding in a big way, mostly offering the floor price at Rs 147 per share.

FII participation in government's share sale programme through the auction route has never seen so much response, the official said.

In the previous ONGC and HCL disinvestment, where the OFS route was taken, state-owned financial institutions had to chip in at the last moment to bail them out.

"The fact that FII money is coming in a big way in a PSU disinvestment is good for the country. It shows FIIs interest is there," the official said.

Since there was no green shoe option, the shares would be distributed following the "price priority" methodology. As per data available with the exchanges, bids were received at an indicative weighted average price of Rs 149.15 per share.

The government had set the floor price for the offer at Rs 147 apiece. NMDC's scrip settled at Rs 154.25, down 3.17 per cent over the previous closing.