Government seeks merchant bankers to manage stake sale in NBCC, HUDCO

By: |
New Delhi | Published: August 24, 2018 4:36:18 AM

The Department of Investment and Public Asset Management (DIPAM) on Thursday sought proposals from merchant bankers to manage proposed 10% government stake sale each in NBCC and Housing and Urban Development Corporation (Hudco) via offers for sale (OFS).

nbcc, hudcoIn May last year, the Centre had sold 10% stake in Hudco via an initial public offering to mop up Rs 1,207 crore at an issue price of Rs 60 per share.

The Department of Investment and Public Asset Management (DIPAM) on Thursday sought proposals from merchant bankers to manage proposed 10% government stake sale each in NBCC and Housing and Urban Development Corporation (Hudco) via offers for sale (OFS). These stake sale could fetch the Centre more than Rs 2,400 crore at current market prices.

The DIPAM also sought proposals to appoint a registrar for the North Eastern Electric Power Corporation’s (NEEPCO) initial public offering (IPO), through which the government plans to sell up to 25% stake in the firm that could fetch over Rs 2,300 crore. It had earlier appointed merchant bankers for NEEPCO public issue.

The timing of the OFS of NBCC and Hudco will be decided later depending on market conditions. At current market prices, a 10% stake sale in Hudco could fetch about Rs 1,100 crore, while a similar stake sale in NBCC could garner a little over Rs 1,300 crore.

In May last year, the Centre had sold 10% stake in Hudco via an initial public offering to mop up Rs 1,207 crore at an issue price of Rs 60 per share.

Besides a fresh tranche of an existing CPSE ETF, officials are optimistic that the line-up of OFS, including in ONGC, Indian Oil and Bharat Electronics, could fetch a substantial sum to achieve the Centre’s disinvestment target of `80,000 crore for the current financial year.

While the Centre could mop up a whopping Rs 1 lakh crore from disinvestment in FY18, helped by ONGC’s Rs 37,000-crore purchase of the government’s 51.1% stake in Hindustan Petroleum, the target for FY19 is challenging as the pipeline is modest and markets have become volatile. So far this year, the government has realised `9,220 crore as disinvestment proceeds.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.