Neyveli share sale fully subscribed, govt gets Rs 350 cr
Government's 3.56 percent stake sale offer in Neyveli Lignite Corporation gor fully subscribed to fetch Rs 350 crore to the exchequer, within an hour of opening trade.
August 02, 2013 / 17:02 IST
The government's 3.56 percent stake sale offer in Neyveli Lignite Corporation (NLC) got fully subscribed to fetch around Rs 350 crore to the exchequer within an hour of opening of trade.
Also read: Neyveli Lignite Corp Q1 results rescheduled on August 09, 2013The Centre was selling over 5.97 crore shares, or 3.56 percent stake, in NLC through an Institutional Placement Programme (IPP) at a price band of Rs 58-60 a share. Sources said mostly the Tamil Nadu-based state PSUs bid for the share sale and preference would be given to them while allotment as per exemption received from Sebi.
The issue received bids for over 6.12 crore shares as against 5.97 crore on offer as of 1100 hrs, as per data available on the BSE.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 were trading at Rs 55, down 1.26 percent 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 last month.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.Post stake sale, Government's holding in the PSU would come down to 90 percent.
Credit Suisse Securities (India), ICICI Securities and SBI Capital Markets are acted as merchant bankers for the issue.Besides, the government is also selling stake in State Trading Corporation (STC) and ITDC through an offer for sale, which would fetch Rs 34.54 crore to the exchequer.
While the base price for ITDC has been fixed at Rs 70 apiece, that for STC has been fixed at Rs 74 apiece.While the sale of 5 percent stake, or 42.88 lakh shares, in ITDC would fetch over Rs 30 crore, about Rs 4.54 crore would come from disinvestment of 1.02 percent, or 6.13 lakh shares in STC at the base price set by the government.Government currently holds 92.11 percent stake in ITDC and 91.02 percent stake in STC. The stake sale would help the three companies meet the minimum 10 percent public holding norm of market regulator Securities and Exchange Board of India (Sebi).The government is required to bring down its stake in these two companies to 90 percent by August 8. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
