EGoM on Nalco stake sale tomorrow; SAIL next week

Keen to achieve the scaled down disinvestment target of Rs 24,000 crore, the government is working to sell part of its stake in Nalco and SAIL in the next fortnight.

The inter-ministerial committee disinvestment is scheduled to meet tomorrow to decide on sale price of Nalco equity, sources said, adding similar meeting for SAIL will be held next week.

"The EGoM is scheduled to meet tomorrow and decide on Nalco base price," they said, adding the issue could hit the market on March 15.

The disinvestment of Nalco and SAIL could together fetch around Rs 4,000 crore to the exchequer, sources said, adding that the MMTC disinvestment is now likely only in next fiscal.

The Empowered Group of Ministers (EGoM) on disinvestment, headed by Finance Minister P Chidambaram, today deferred MMTC's 9.33% stake sale on valuation concerns.

At the current market price the 12.5% or 31.31 crore shares of Nalco is expected to fetch around Rs 1,400 crore to the exchequer. Shares of Nalco closed at Rs 45.25, down 0.11% on the BSE.

The Department of Disinvestment (DoD) has held roadshows in Singapore, Hong Kong, Japan, the US and the UK last month for disinvestment of the state-run aluminium company.

The government currently holds 87.15% stake in Nalco, and post stake sale its holding would be 75%.

The government had in November last year deferred disinvestment of Nalco citing poor second-quarter performance which raised valuation concerns and said the stake sale would happen only after the third quarter results.

The aluminium major reported a more than two-fold jump in its October-December quarter net profit to Rs 118.94 crore, on the back of improved sales. National Aluminium Company (Nalco) had a profit of Rs 51 crore in same period last fiscal.

Enam Securities, SBI Caps and IDFC are merchant bankers for the Nalco disinvestment.

The Cabinet Committee on Economic Affairs (CCEA) had in September 2012 approved disinvestment in the Navratna PSU.

The stake sale would happen through the Offer for Sale (OFS) or auction route. The paid-up capital of the company as on March, 2012 stood at Rs 1,288.62 crore.

SBI Caps, Kotak Mahindra and Deutsche Bank are the merchant bankers for the SAIL issue.

The SAIL stake sale, which is slated on March 20, could fetch around Rs 3,000 crore to the exchequer. Shares of SAIL closed at Rs 70.95, up 0.71% on BSE.

The CCEA had in July last year approved 10.82% disinvestment in SAIL out of government's 85.82 percent stake.

The government estimates to collect Rs 24,000 crore from disinvestment in the current fiscal and has already raised Rs 21,500 crore.