Mining giant NMDC today said its Board of Directors will meet next week to consider a proposal of buyback of company’s shares.
The state-run firm, however did not elaborate upon the number of shares that it is planning to buyback.
“A meeting of the Board of Directors of the company will be held on June 7, 2016, inter alia, to consider the proposal for buy back of the fully paid-up equity shares of the company of face value of Rs 1 each,” it said in a BSE filing.
Government held 80 per cent stake in the country’s largest iron ore miner, at the end of March 2016.
The development comes amidst the government proposing to put up about 39.64 crore shares through Offer for Sale(OFS) which can fetch an estimated Rs 3,600 crore at the current market price.
Last month, five merchant bankers, including ICICI Securities, Citibank and SBI Capital, were shortlisted for assisting disinvestment of government’s 10 per cent stake in the blue-chip NMDC.
The other two merchant bankers/selling brokers are Edelweiss Financial Services and Deutsche Bank.
The government would also allot shares up to a maximum of 5 per cent of the OFS size to NMDC employees at a discount of 5 per cent to the issue or discovered price. The employees will be eligible to apply for shares up to Rs 2 lakh only.
Proceeds from NMDC disinvestment will be part of government’s total disinvestment target of Rs 56,500 crore during this fiscal.