NLC divestment: Deutsche, I-Sec, IDFC in race for mandate to advise govt

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26 Aug, 2025 12:21

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Deutsche Equities, ICICI Securities and IDFC Bank are in the race to get the government’s mandate to advise it on the proposed sale of its shares in NLC India (formerly Neyveli Lignite Corporation). The government wants to sell shares equivalent to 15 percent of the state-owned company’s equity as part of its plan to divest its holding in public sector companies.

The government intended to select up to four bankers for the transaction but with only three in the fray, all three could get selected. The fee in any case is not likely to be anything but one rupee for each.

NLC’s equity comprises 1.52 billion shares. The government holds 89.32 percent stake in the coal mining and power generating company. At today’s market price of Rs. 107, sale of 15 percent of the company’s equity will fetch the government Rs. 2,453 crore.

The paid-up equity capital of the Chennai-headquartered public sector company was Rs 6,669 crore as on March 31, 2016. NLC has chalked out a Rs 8,948.12 crore capital expenditure plan for the ongoing financial year.

The government plans to raise Rs 72,500 crore through sale of its shares in various companies. It aims to achieve this by raising Rs 46,500 crore via minority stake sales, Rs 15,000 crore through strategic stake sales and Rs 11,000 crore from the listing of various public sector insurance companies. Total disinvestment proceeds during the current financial year so far amount to Rs 1,195.46 crore.

Besides NLC, the list of companies lined up for divestment of government holding through the stock market route includes Indian Oil Corporation, NTPC, Rural Electrification Corporation, Power Finance Corporation, RITES, Rail Vikas Nigam and NHPC.

With names of NLC divestment advisors likely to be out today, only the selection of merchant bankers for Rail Vikas share sale will remain. That process is also underway.