Govt sells stake in Neyveli, STC, ITDC; raises Rs 395 cr

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Saturday, August 03, 2013
Published On: 01:57:47 AM
Govt sells stake in Neyveli, STC, ITDC; raises Rs 395 cr

The 3.56 per cent stake sale in Neyveli Lignite Corporation (NLC) fetched Rs 360 crore to the exchequer with all of the shares being picked up by five Tamil Nadu government firms.

Besides, the sale of 5 per cent stake, or 42.88 lakh shares, in ITDC fetched over Rs 30 crore. Another Rs 4.54 crore came in from STC disinvestment of 1.02 per cent, or 6.13 lakh shares.

The stake sale would now make the three PSUs compliant to the minimum 10 per cent public holding norm of market regulator Sebi. Post stake sale, government's holding in the PSUs has come down to 90 per cent.

The Centre sold over 5.97 crore shares, or 3.56 per cent stake, in NLC through an Institutional Placement Programme (IPP) at a price band of Rs 58-60 a share.

"Allotment of NLC shares would be made to five Tamil Nadu-based PSUs as they were the highest bidders in the IPP. We will raise around Rs 360 crore," a finance ministry official said.

The NLC issue, which got over-subscribed within an hour of the opening of trade, received bids for over 6.12 crore shares as against 5.97 crore on offer.

Earlier this month, market regulator Sebi had given go-ahead to the disinvestment department's proposal to give preference in share allotment to those PSUs located in states in which Neyveli's generating units were located.

Shares of NLC closed at Rs 55.05, down 4.76 per cent over previous close on the BSE.

The Tamil Nadu government has been insisting that it would buy the entire central government stake that is being divested in the state lignite mining and power producing company and had written to Prime Minister Manmohan Singh in this regard in June.

The TN government has said it has five state PSUs which can be qualified as QIBs (Qualified Institutional Buyer). The DoD has sought exemption from Sebi so that preference is given to allot shares to these PSUs only.

The stake sale in State Trading Corporation (STC) got over-subscribed 1.13 times with bids coming in for over 6.90 lakh shares, against 6.13 lakh shares on offer.

However, the ITDC disinvestment scraped through with the issue getting bids for 46.71 lakh shares or 1.09 times of the 42.88 lakh shares on offer.

The base price for ITDC and STC were Rs 70 apiece and Rs 74 apiece respectively.

With the three stake sales today, the government raised about Rs 1,323 crore as disinvestment proceeds so far this fiscal.

Earlier it had sold stake in MMTC, Hindustan Copper and National Fertilisers. The government targets to raise Rs 40,000 crore through PSU stake sale in 2013-14.

Courtesy : Indian Express

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