PTI reported that the government is likely to sell its 10% equity this week in iron ore miner NMDC, which could fetch the exchequer nearly INR 6,300 crore at the current market price.
A senior government official said that "The stake sale in NMDC would happen either on Thursday or Friday. The date and price will be finalized by the empowered group of ministers, which is expected to meet on Tuesday."
The Cabinet Committee on Economic Affairs on October 25th approved disinvestment of 10% government shares in NMDC, amounting to 39,64,71,600 shares of face value of INR 1 each to investors through Offer for the Sale route, also known as auction route.
The NMDC issue comes within a month after government selling its 5.58% stake in Hindustan Copper for about INR 807 crore. NMDC issue will be the second disinvestment by the government in this fiscal.
The official said that "Unlike Hindustan Copper issue, the base price for NMDC share sale will not see steep discount and will be maximum in the range of 10% to 15%."
Official said that "NMDC's book value is INR 61.56, while its average trading price is in the range of INR 160. Then, NMDC is a debt free company, is sitting on a cash pile of over INR 20,000 crore and is the largest domestic iron ore miner."
However, in the June to September quarter, its net profit was down nearly 15% at INR 1,678.62 crore largely due to fall in sales and lower production.
Currently, the government holds 90% stake in NMDC. As of March 31st 2012, the state owned iron ore miner had a paid up equity capital of INR 396.47 crore.
Source - PTI
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