Govt cold to bankers’ views on discount in NMDC sale
For the upcoming disinvestment of the state-run NMDC, the government is likely to keep the sale price of its shares in the company closer to the prevailing market price to maximise earnings. The plan is to disinvest 10% equity in the mineral explorer.
This is despite the fact that bankers handling the sale favour offering the shares at an attractive discount from the market prices. The issue, expected to be carried under the offer- for- sale or the auction route, could fetch the government close to R7,000 crore. It may be opened in the second half of this month. Sources said bankers preferred a discounted price, as was done in the issue of Hindustan Copper, to get wider participation from global investors.
The government, on the other hand, is set to go with the NMDC management that is confident that the good market positioning of the company should, in fact, fetch its shares a premium, let alone at discounted price. In the HCL issue, the floor price of shares was fixed at a discount of 40% over the market price.
Already, the share sale programme for PSUs Nalco and RINL has been postponed indefinitely over valuation differences. The steel ministry’s strong opposition to lower valuations has also delayed the SAIL disinvestment plan.
“Shares of NMDC would not priced be at a discount. It is a professionally-run company that has the lowest operating cost of iron ore in the world at $15.5 per tonne. Its Ebitda
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