The disinvestment of NALCO (The National Aluminium Company), which could fetch Rs 1,400 crore to the exchequer, is likely to hit the market during the first week of March after the Budget to ensure it is not impacted by volatility in the stock-markets.
The department of disinvestment (DoD) will start roadshows in Singapore, Hong Kong, Japan, US and UK on February 19 for disinvestment of the state-run aluminium company. The roadshows would conclude on February 25, sources said.
"Nalco disinvestment will happen only after the Budget. There is lot of volatility in the markets before the Budget and hence we have decided to schedule it in the beginning of March," sources said. The Budget is to be presented in Lok Sabha on February 28.
The 12.5-percent stake or Rs 31.31-crore share-sale of NALCO is expected to fetch around Rs 1,400 crore to the exchequer at the current market price. Shares of NALCO closed at Rs 47, up 0.75 percent on the BSE.
The government currently holds 87.15-percent stake in NALCO. The government had in November 2012 deferred disinvestment of NALCO citing poor second-quarter performance which raised valuation concerns and said the stake sale would happen only after the third quarter results.
The aluminium major reported a more than two-fold jump in its October-December quarter net profit to Rs 118.94 crore, on the back of improved sales. NALCO had a profit of Rs 51.22 crore in the same period last fiscal.
"We expect to get good valuation of Nalco. Last time, merchant-bankers advised the deferment of the offer to the March quarter. This time we want to do it only when the market is stable," sources said.
Enam Securities, SBI Caps and IDFC are merchant bankers for the Nalco disinvestment. The Cabinet Committee on Economic Affairs (CCEA) had in September 2012 approved disinvestment in the 'navratna' PSU. Following the stake-sale, the government's holding will come down to 75 percent in the company.
The stake sale would happen through the offer-for-sale (OFS) or auction route. The paid-up capital of the company as on March, 2012 stood at Rs 1,288.62 crore.
NALCO stock price
On November 24, 2015, National Aluminium Company closed at Rs 37.45, down Rs 0.35, or 0.93 percent. The 52-week high of the share was Rs 62.50 and the 52-week low was Rs 28.00.
The company's trailing 12-month (TTM) EPS was at Rs 4.26 per share as per the quarter ended September 2015. The stock's price-to-earnings (P/E) ratio was 8.79. The latest book value of the company is Rs 49.66 per share. At current value, the price-to-book value of the company is 0.75.
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