The NMDC issue was oversubscribed 1.73 times today, fetching Rs 6,000 crore for the government for its 10 per cent stake, thanks to strong participation from FIIs and state-run insurer LIC.
The success of the issue, in which 68.69 crore bids were received, as against 39.65 crore on the block through the Offer for Sale (OFS) route till 1600 hrs -- according to the stock exchange data -- will pave the way for disinvestment of a clutch of other PSUs lined up.
"We have mopped up about Rs 6,000 crore from NMDC share sale. The average weighted price for the bids is Rs 150 per share," a top Finance Ministry official said.
The official said a bulk of the bids came from FIIs at an average price Rs 150 per share, while state-owned financial institutions including LIC took part in the bidding in a big way, mostly offering the floor price at Rs 147 per share. FII participation in government's share sale programme through the auction route has never seen so much response, the official said.
In the previous ONGC and HCL disinvestment, where the OFS route was taken, state-owned financial institutions had to chip in at the last moment to bail them out.
"The fact that FII money is coming in a big way in a PSU disinvestment is good for the country. It shows FIIs interest is there," the official said.
Since there was no green shoe option, the shares would be distributed following the "price priority" methodology. As per data available with the exchanges, bids were received at an indicative weighted average price of Rs 149.15 per share.
The government had set the floor price for the offer at Rs 147 apiece. NMDC's scrip settled at Rs 154.25, down 3.17 per cent over the previous closing.
Actual bids may be even higher as stock exchanges are yet to complete the compilation of data of all the bids that were received since the opening of the process at 0915 hrs today.
The issue closed at 1530 hrs.
NMDC had reserved one-fourth of the issue for mutual funds and insurance firms. However, no single bidder, other than mutual funds and insurance firms, would be allocated more than 25 per cent of the total offer.
NMDC was the second disinvestment candidate in the current fiscal during which the government plans to raise Rs 30,000 crore by selling stakes in around a dozen PSUs.
On November 23, it had garnered Rs 808 crore by selling 5.58 per cent stake in Hindustan Copper.
The government is planning to launch the NTPC issue, for divesting 9.5 per cent stake in the largest power generator, on January 15.
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India's NMDC $1.1 bn share sale fully covered: exchange data
(Reuters) India's up to $1.1 billion share auction in state miner NMDC Ltd was fully covered by 3.25 p.m. (0955 GMT) on Wednesday, provisional data from the
National Stock Exchange showed. By 3.25 p.m. (0955 GMT), the offer had received bids for 411.70 million shares, at an indicative weighted average price of 149.09 rupees per share. Final bid numbers will be available later on Wednesday.
The government was selling 396.47 million shares, or 10 percent of the company's stock and had set a floor price of 147 rupees per share for bids.
The share sale is the largest by the government since a messy $2.5 billion auction of shares in state explorer Oil and Natural Gas Corp in March that had required large bids from state investors.