The capital market will see one more divestment issue before the current financial year comes to an end. The government has decided to go ahead with its decision of divesting a 10% stake in National Buildings Construction Corporation (NBCC) in the second half of March.

According to additional divestment secretary Sidhartha Pradhan, the initial public offer (IPO) of NBCC will open on March 22 and close on March 25. The empowered group of ministers (EgoM) will meet on March 19 to decide the price band for the issue. ?We are planning to open NBCC on March 22. It will close on March 25,? Pradhan told a television channel on Wednesday. ?The IPO price band will be decided in the EGoM meeting on March 19,? he added.

The government-owned entity, which is engaged in project management consultancy services for civil construction projects along with interests in power and real estate sectors, filed the draft red herring prospectus with the Securities and Exchange Board of India (Sebi) in February. It intends to offer 12 million equity shares and has appointed IDBI Capital Market and Enam Securities as the book running lead managers.

The additional divestment secretary also clarified that NBCC will be the last divestment issuance in the current financial year and decisions on other issues will be taken only after March.

He said that BHEL, Oil India and SAIL would be considered for divestment in the next financial year.

According to Pradhan, the government will evaluate both ? auction and follow-on public offer (FPO) ? routes to divest its stake in already-listed public sector undertakings (PSUs).

?The FPO route is there and we have offer for sale that is auction route and these are the two routes of follow-on public offerings,? he said.

Interestingly, ONGC recently concluded its 5% stake sale through the auction route ? the first of its kind in the country ? that saw its own share of controversies. When the auction came to an end, initial data from stock exchanges showed that the issue was under-subscribed. Later, however, it was said that the buy order from LIC ? amounting to nearly 95% of the total offer size ? was not processed due to technical glitches at the custodian level. The buzz in the market was that LIC had to place a last-minute large order to bail out the issuance that was done at a premium to the then market price.

The divestment department official has said that the government has taken note of important issues from the ONGC auction process and are in the process of getting more feedback.

?This was the first process that we had in India, we have learned quite a few things… we’ll have only one designated stock exchange not two, that is for certain because there is a lot of confusion… We will request whoever puts in the largest bid or aggressive bids should choose the custodian very carefully,? said Pradhan when asked about the key learning from the auction. The LIC custodian has not come out well, he added.

He further said that the government is in dialogue with the capital market regulator to ?iron out any glitches? to improve the auction route.

Sebi will have to look into complaints related to the auction method from institutional investors, he said. In case of ONGC auction, investors said that there was lack of bid information and also that bids should have been live so that everyone could have access to the price.