You are here: Home » Business » NMDC disinvestment likely by Dec 15
NMDC disinvestment likely by Dec 15
New Delhi, Nov 23, 2012 (PTI) 11:48 IST
Encouraged by the response to its stake sale in Hindustan Copper, the government today said disinvestment of its 10 per cent shares in NMDC is likely to take place in first half of the next month.
"NMDC disinvestment should be in the first fortnight of December... They have estimated about Rs 7,000 crore. Let's see," Disinvestment Secretary M Haleem Khan told reporters.
Last month, the government had approved 10 per cent stake sale in the country's largest iron-ore miner NMDC that could fetch the exchequer over Rs 7,000 crore. The disinvestment, like in the case of Hindustan Copper, will be through Offer for Sale (OFS) route, popularly known as auction method.
The Government will offer about 39 crore equity in NMDC of face value of Rs 1 each to investors. At present, the government holds 90 per cent stake in the National Mineral Development Corporation (NMDC). As of March 31, 2012, the paid up equity capital of NMDC was Rs 396.47 crore. NMDC has reported a nearly 15 per cent decline in net profit at Rs 1,678.62 crore for the quarter ended September 30, 2012, largely due to lower production and fall in sales.
Shares of NMDC closed at Rs 166.50 apiece, down 1.89 per cent on the BSE today. Kick-starting the disinvestment process of this year, the government today sold 5.58 per cent stake in Hindustan Copper for about Rs 808 crore at an average price of Rs 156.56 apiece, with bulk of the bids coming from LIC and PSU banks.
Encouraged by the response to the first stake sale in the current financial year, Finance Minister P Chidambaram expressed the hope that government would able to garner the targetted Rs 30,000 crore in 2012-13 through disinvestment.
When asked about the proposed exchange traded funds (ETF) to sell shares of PSUs, Khan said, "We have appointed the advisors and they have already made two presentations. On the basis of report of advisors we will move on for authorisation."
An ETF is an investment fund traded on stock exchanges much like stocks. The fund would be benchmarked against an index on the stock exchange. It will act as additional avenue for disinvestment. The Secretary also expressed confidence that Rs 30,000 crore disinvestment target for the fiscal would be met.
"I think we have got enough CCEA's sanction so unless something seriously goes wrong, I don't think there should be any problem (in meeting disinvestment target)," he said.
Among other the Cabinet Committee on Economic Affairs (CCEA) has cleared disinvestment in RINL, Nalco, SAIL, OIL India, BHEL and NTPC. The government's sale of 4 per cent stake in Hindustan Copper Ltd (HCL) was over-subscribed today. A total bid for 5,16,11,858 shares were received. It has been decided to accept the entire number of shares bid for at or above the floor price.
Thus, approximately 5.58 per cent of the total paid up share capital of HCL stands divested through this issue. The approximate gross receipts from the issue is Rs 800 crore.