The government on Friday raised over Rs 620 crore through sale of its 6 per cent stake in aluminium producer Nalco, taking it closer to its fund-raising target to reduce the Budget deficit.
The Nalco auction received bids for a total of 15.69 crore shares, or 6 per cent of its capital, at a weighted average price of Rs 40.05. The issue size was pruned to 12.88 crore shares or 5 per cent plus an option to retain an equal number in case of over-subscription. The government, which priced the issue at a discounted price of Rs 40 a share, decided to retain all of additional bids for over 2.81 crore shares that came in. Shares of Nalco closed at Rs 40.35, down 8.81 per cent over previous close on the BSE.
The indicative price, which is the weighted average price of all valid bids, was Rs 40.05 a share. At this price, the government would garner over Rs 620 crore. The EGoM on disinvestment, headed by finance minister P Chidambaram had on Wednesday cleared stake sale of 25.77 crore shares, or up to 10 per cent, in Nalco through the offer-for-sale (OFS) route.
Bids for over 4.08 crore shares were with 100 per cent margin, meaning if a bidder decides to withdraw later he can do so. Over 11.60 crore shares attracted bids with zero per cent margin, according to the NSE data. The number of shares on offer is lower than what the Cabinet Committee on Economic Affairs (CCEA) had approved for in September last year. The CCEA had cleared a 12.5 per cent stake sale in the PSU.
The proceeds from Nalco stake sale would help government bridge the fiscal deficit. The government estimates to collect Rs 24,000 crore from disinvestment in the current fiscal and has already raised over Rs 21,800 crore so far. The government holds 87.15 per cent stake in Nalco.