With Nalco’s offer for sale (OFS) subscribed 1.84 times by institutional investors on Wednesday, the government’s disinvestment programme for this fiscal has got off to a good start. Wholesale investors bid for as many as 14.24 crore shares against the 7.73 crore shares on offer.
The floor price for the shares is `67 and the total number of shares on sale is 9.66 crore or 5% of the total paid-up capital of the aluminium producer. The government said in an exchange filing on Tuesday that it may sell another 5% of the firm’s equity. The issue will be thrown open to retail investors on Thursday.
The Nalco stock ended Wednesday’s session at Rs 67.75, falling 7.76%. A total of 12.29 lakh shares were traded on the two main exchanges — the BSE and NSE — and the volume was 2.6 times higher than the average daily volumes in six months.
The government at present holds 74.58% in the company and the stake sale will fetch it Rs 647 crore at the price of Rs 67 per share. In FY17 Nalco’s share price saw an appreciation of 94.6% against a gain for the benchmark Sensex of 17.22%.
The sale of shares in Nalco via the OFS route follows a buyback by the company of its shares in FY17 for an amount of Rs 2,835 crore; the government got Rs 2,831.71 crore. The buyback of shares was done at a price of Rs 44 per share.
Nalco reported revenues of Rs 1,988 crore in Q3FY17, an increase of 14.05% year-on-year. The aluminium player earned a profit after tax of Rs 143 crore, a decrease of 2% y-o-y. The government hopes to raise Rs 72,500 crore in FY18 through a combination of minority stake sales, strategic disinvestments and through listing of state-owned insurance companies.
The government raised Rs 46,246.58 crore in FY17 through buybacks, OFS, stake sales through central public sector enterprises exchange-traded fund, and through divestment of strategic holdings in the Specified Undertaking of Unit Trust of India. Of this, Rs 7,475.23 came through OFS in various companies. NHPC, HCL, NBCC, MOIL and BEL were among the companies in which the government sold stakes.