The Department of Disinvestment (DoD) has appointed IDBI Capital Markets as the merchant banker to divest 7.64% stake in National Fertilizers (NFL) via the offer-for-sale (OFS) route to make it compliant with the market regulator?s minimum public shareholding norms.
Avendus, IDBI Capital, Kotak Investment Banking and SBI Capital were the four bankers that had shown interest in handling the OFS and had submitted their technical and financial bids along with the final presentation to DoD.
Sources said the DoD is now in the process of choosing destinations for marketing roadshows ahead of the NFL disinvestment. While the department is yet to zero in on specific destinations, given the size of the auction, roadshows would be restricted to metros and major tier-I cities.
The NFL auction is scheduled for the last week of July. The government intends to sell around 3.75 crore shares in the state-owned fertilizer company that would fetch the Centre around R125 crore at the current market price. On Friday, NFL shares ended down R0.05 or 0.15% at R33.50 a piece.
As per Sebi guidelines, promoter holding in listed public sector companies has to be lowered to 90% by August 8. NFL, which enjoys a mini Ratna status, is one of India?s major producers of inorganic and organic fertilizers. It is fully owned by the government and falls under the administrative control of the ministry of chemicals and fertilizers. The New-Delhi based company posted a net loss of R107.04 crore in Q4FY13 compared to a net profit of R56.87 crore in the corresponding period of the previous fiscal.
According to Capitaline , the stock is valued at 1.04 times price-to-book value (P/BV) at the current market price. This compares with Deepak Fertilizers? 0.7 times, Mangalore Chemicals Fertilizers? (1.3 times), Zuari Agro Chemicals (0.4 times), Chambal Fertilizes (0.82 times), and Fertilizers and Chemicals Travancore (8.43 times).