With Nalco’s offer for sale (OFS) subscribed by 1.43 times by investors on Thursday, the government’s disinvestment programme for the current financial year has got off to a good start. A total of 17.80 crore shares were offered to investors and bids were received for 25.53 crore shares. Retail investors on Thursday bid for as many as 11.29 crore shares against the 3.56 crore shares on offer. The floor price for the shares was `67 and the total number of shares on sale was 17.80 crore or 9.21% of the total paid-up capital of the aluminum producer. The government on Wednesday informed exchanges that they have decided to exercise the oversubscription option to the extent of 8.14 crore shares and the total offer will be 17.80 crore shares.
The government initially planned to sell 9.66 crore shares or 5% of the total paid-up capital of the company. The Nalco stock ended Thursday’s session at Rs 68.10, a gain of 0.52%. Nalco’s share price fell by 7.76% on Wednesday. A total of 15.18 lakh shares was traded on the two main exchanges — BSE and NSE — and the volume was 3.16 times higher than 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, the share price of Nalco 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 Rs 2831.71 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 aluminum 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 the listing of state-owned insurance companies. The government raised Rs 46,246.58 crore in FY 17 through buybacks, OFS, stake sales through central public sector enterprises exchange traded fund (CPSE ETF), and through divestment of strategic holdings in Specified Undertaking of Unit Trust of India (SUUTI). Of this Rs 7475.23 came through OFS in various companies. NHPC, HCL, NBCC, MOIL and BEL were among the companies in which the government sold stakes.