EGoM fixes NMDC price band at Rs 300-350

The Union government fixed the price band for NMDC’s follow-on public offer (FPO) at Rs 300-350 a share. The decision was taken by an empowered group of ministers.

The government owns 98.38 per cent of the paid-up equity capital and plans to divest 8.38 per cent stake in the country’s largest iron ore producer. The plan was approved in December.

The FPO opens on Wednesday, offering 332,243,200 equity shares of a face value of Re 1 each. At the floor price, the issue would fetch the government Rs 9,967.29 crore. At the upper end of the band, the issue would get Rs 11,628.51 crore. The government needs Rs 11,388 crore to complete its Rs 25,000-crore disinvestment target for 2009-10.

Earlier, the company had said it would provide 5 per cent discount to retail investors and its employees on the issue price. This would be decided after the FPO closes on Friday.

It has reserved 50 per cent of shares for qualified institutional buyers, while 35 per cent will be allocated to retail investors, including foreign institutional investors and mutual funds.