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The Union cabinet's decision to clear an additional 8.38 per cent stake sale proposal of the country's largest iron ore producer NMDC has been welcomed by the mining major. ”With the government offloading shares, it will fetch the ex-chequer in excess of Rs 13,500 crores,”' chairman cum managing director of NMDC Rana Som told Financial Chronicle.
At present, the government at present holds about 98.38 per cent stake in the navratna firm, whose shares are now being quoted at over Rs 400 a share on the Bombay stock exchange. About 1.62 per cent holding has already been made public. Som said that the disinvestment process may start within the next few weeks.
The steel ministry had earlier this year recommended to the department of disinvestment selling 8.38 per cent of government's equity in the firm. But the department later proposed a 15 per cent stake sale in the company.
The steel ministry did not approve of the changes in the proposal and sent back its previous plan to the disinvestment department.
The proceeds of the disinvestment will be used to partly fund government's social sector and infrastructure programmes. The company is not planning to launch a simultaneous public offer to raise additional capital.
Shares of the firm, which has market capitalisation of Rs 1.61 lakh crore, closed 0.31 per cent down to Rs 406.90 on the Bombay stock exchange on Tuesday.
According to Som, there was no move to get in foreign investors for the divestment. “Nothing has chan-ged. We still hold the majority shares and a governme-nt-appointed director may preside over the divested shares,” he said.
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