Nov 15, 2012, 06.41 PM | Source: PTI
The government today said it is planning 10 per cent stake sale in NMDC by mid-December, which could fetch the exchequer about Rs 7,500 crore.
"NMDC disinvestment is likely by mid-December. We hope to raise Rs 7,500 crore via 10 percent share sale in it," Steel Secretary D R S Chaudhary said on the sidelines of inaugural function of steel pavellion in the India International Trade Fair here.
Steel Minister Beni Prasad Verma said the process of NMDC disinvestment has already begun and roadshows were being organised.
Earlier this month, the government appointed leading law firm ALMT Legal, Advocates & Solicitors as legal adviser for selling its 10 percent stake in the country's largest iron ore miner.
The government has also appointed Citigroup Global Markets India, Goldman Sachs (India) Securities, DSP Merrill Lynch (all Mumbai based), Enam Securities and ICICI Securities (Delhi based) as Merchant Bankers for the stake sale.
The stake sale will take place through "Offer for Sale by promoters through the stock exchanges" (OFS) method. The Cabinet Committee on Economic Affairs (CCEA) had on October 25 cleared sale of about 39 crore equity of NMDC of face value of Rs 1 each through the OFS route.
At present, the government holds 90 percent stake in the National Mineral Development Corporation (NMDC). As of March 31, 2012, the paid up equity capital of NMDC stood at Rs 396.47 crore.
After disinvestment through the OFS mode, the government holding in the entity will come down to 80 percent. NMDC has reported a nearly 15 percent decline in its net profit at Rs 1,678.62 crore for the quarter ended September 30, 2012, largely due to lower production and fall in sales. NMDC, under administrative control of Ministry of Steel, is primarily engaged in the business of iron ore mining.
But it has also been expanding its activities into production of steel and other value added products. It operates two mining complexes in Chhattisgarh and one in Karnataka. Although government had earlier proposed stake sale in NMDC, it postponed the decision due to poor market conditions.
The government plans to raise Rs 30,000 crore from disinvestment during the current fiscal. However, it has not been able to come out with any public issue during the first seven months of the fiscal.
Due to uncertain market conditions, the government in the last fiscal could raise only Rs 14,000 crore from disinvestment against the target of Rs 40,000 crore.