Neyveli Lignite up 2% on Sebi nod to TN buying stake in co

Moneycontrol Bureau

Neyveli Lignite (NLC) shares climbed around 2 percent to Rs 59.45 after market regulator Sebi allowed Tamil Nadu state to pick up central government's 5 percent equity in the state run company, provided the acquisition is done by a qualified state entity.

The Centre currently holds 93.56 per cent stake in NLC. The stake sale is being proposed done to meet the minimum public holding norm. Sebi has set a deadline of August 8, 2013, for all listed central public sector units to have a minimum 10 per cent public shareholding.

Must Read: AIADMK holds demonstrations against NLC disinvestment

The Cabinet had last month cleared sale of 7.8 crore shares, or 5 per cent of government's stake, through an offer for sale in NLC to raise Rs 455 crore at current price.

Meanwhile, an official statement said, " Sebi is of the view that the proposal could get covered within the guidelines on Institutional Placement Programme (IPP). However, the exact details that require discussions with the officials of Tamil Nadu government, Ministry of Coal and Department of Disinvestment need to be worked out."

"In the offer document for IPP, the seller can propose the criteria on the basis of which allocation could be made. This can be used to give preference to any set of Qualified Institutional Buyers including state undertakings of Tamil Nadu," the statement added.

"Ministry of finance has requested the Government of Tamil Nadu to nominate a senior official for further discussions with SEBI with regard to its proposal," it concluded.