The government will tomorrow sell 15 per cent stake in construction company NBCC (India) Ltd at a floor price of Rs 246.50 a share, which is expected to fetch around Rs 2,200 crore.
The floor price fixed for the Offer of Sale was at a discount to NBCC's today's closing price of Rs 253 on the BSE.
As much as 9 crore shares will be sold over two days, with institutional investors getting to bid on the first day tomorrow and retail investors getting a chance on Friday.
"20 per cent of the offer size shall be reserved for retail investors subject to the receipt of valid bids," the Offer for Sale notice said.
The Offer would open at 0915 hours on Thursday.
Retail investors, who were defined as individual investors who place bids for sales of total value of not more than Rs 2 lakh in aggregate, will be allocated sahes at a discount of 5 per cent of the cut-off price.
Any unsubscribed portion of the retail category shall, after allotment, be eligible for allocation to the un-allotted bids of such non-retail investors who have chosen to carry forward their bids to Friday.
"The President of India (acting through and represented by the Ministry of Urban Development, Government of India) proposes to sell up to 9 crore equity shares of NBCC (India) Ltd on October 20, 2016, (for non-retail investors) and October 21, 2016 (for retail investors and non-retail investors who choose to carry forward their un-allotted bids) of face value of Rs 2 each, representing 15 per cent of the total paid-up equity share capital," the notice said.
The government holds 90 per cent in the company, which has a market capitalisation of Rs 15,180 crore.
According to sources, foreign brokerages have a 70 per cent 'buy' and 30 per cent 'hold' opinion on NBCC shares.
The share sale will help the company meet SEBI norms that mandated PSUs to have a minimum public holding of 25 per cent.
The Cabinet had in July this year cleared disinvestment in the project management consultancy and real estate development company.
NBCC was listed on the bourses in 2012 when the government diluted 10 per cent stake to raise Rs 127 crore. The price band of the NBCC IPO was then fixed at Rs 90-106 per share.
In May this year, shareholders had approved stock split to facilitate the FPO under the government's disinvestment programme. The company has split its share of Rs 10 each into five with a face value of Rs 2 each.
The stake sale is part of government's Rs 56,600 crore disinvestment programme for the current fiscal. So far this fiscal, the government has raised Rs 6,414 crore through OFS and buy back of equity.