Govt likely to offer price band to investors for NMDC FPO

The government is likely to sell its over 33 crore shares in mining major NMDC next month through a price band of Rs 415-430 a share and dump the auction route adopted in the case of two power PSUs NTPC and REC.

A decision on the mode of disinvestment, that is likely to commence from March 10, as also the price band is likely to be taken in a day or two, NMDC Chairman Rana Som told PTI but declined to divulge the details saying these decisions are with the government.

At the prevailing market price of around Rs 465 a share, the issue could attract around Rs 15,500 crore but the price band could be around Rs 415-430 as part of efforts to attract more investors, sources in the know said.

Though Som refused to answer any query on what route he would prefer and if NTPC route of auction could enthuse NMDC, some officials in the know said "book building route should be a preferred option for the government to really reach the retail investors".

NTPC came out with an FPO earlier this month through which the government divested five per cent of its equity in it while REC launched its share sale today.

The FPO followed French Auction -- a pure auction route. It differs from the prevalent practice of giving shares on book building route, which gives a price band to investors.

Subscribed just 1.2 times, the NTPC's over Rs 8,000-crore issue has attracted criticism for what many thought a poor response.