Government to sell 5% stake in NALCO via OFS at Rs 62.5-63.5/share; may fetch Rs 600 crore

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Published: February 16, 2017 11:27:09 AM

The OFS will be priced at about Rs 62.5-63.5, and will be launched in a “few days”. The indicative price is at 2-4% discount to the yesterday’s closing price of Rs 64.95.

The indicative price for the NALCO OFS is at 2-4% discount to its yesterday’s closing price of Rs 64.95. (Image: Reuters)The indicative price for the NALCO OFS is at 2-4% discount to its yesterday’s closing price of Rs 64.95. (Image: Reuters)

The government will disinvest 5% equity stake in the state-run aluminium producer NALCO (National Aluminium Company Limited) via an OFS (offer for sale of shares), ET Now reported on Thursday citing unidentified sources.

The OFS will be priced at about Rs 62.5-63.5, and will be launched in a “few days”, the report said. The indicative price is at 2-4% discount to the yesterday’s closing price of Rs 64.95.

NALCO shares were trading firm at Rs 65.15, up 0.31%, near the day’s high of Rs 65.5.

The government owns 75% in the company. ET Now reported that SBI Cap, Edelweiss and ICICI Securities will be the bankers to the proposed issue.

Back of the envelope calculations show that the government will fetch over Rs 600 crore from sale of 5% stake in NALCO at the indicated price.

Indian government has undertaken strategic sale of stake in profitable PSUs to help boost up state revenue and bridge the fiscal deficit, but has repeatedly fallen short of its disinvestment targets in the past. It has a target to earn Rs 56,500 crore by divesting its stake in public sector undertakings in the current financial year 2016-17, out of which, it has already earned Rs 31,000 crore. It has an even more ambitious disinvestment target of Rs 72,500 crore in the next financial year.

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The ET Now report said that the government is planning to raise about Rs 5,000-7,000 crore by March-end by disinvesting equity stakes in PSUs.

Earlier in September last year, the government had fetched Rs 2,832 crore by tendering NALCO shares in a buyback.

For the next year, among marquee disinvestment projects, the government plans to launch its second CPSE ETF – the exchange-traded fund of public sector enterprises; and seeks to sell 10% equity stake each in three state-run railway companies IRCTC, Ircon and IRFC via an IPO (initial public offer) in the next financial year 2017-18.

Earlier last month, the Union Cabinet also approved listing of five state-run general insurance companies, which is likely to begin only in the next financial year with the first listing possible by September-October.

 

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