Govt to sell 8.38% in NMDC in 2009-10

The government will sell 8.38 per cent of its stake in the mining major NMDC before March 31, 2010, generating Rs 14,100 crore from the process.

As part of its divestment programme, the government proposes to sell 8.38 per cent of its stake in NMDC through a follow-on public offer before the end of the fiscal.

“The government has expressed its desire to complete the process of disinvestment of 8.38 per cent in NMDC, out of the government's shareholding through a public offer in the domestic market during the current fiscal,” NMDC said in a filing to the BSE today.

The government holds about 98.38 per cent in the largest miner, and the rest is with the public. The amount raised would be used for funding social sector schemes, since the government is running a high fiscal deficit, pegged at 6.8 per cent of GDP for the current fiscal, as it pumped more money into the economy through a number of stimulus packages following the global downturn.

The NMDC public issue would be among the four FPOs planned by the government for this fiscal. Public issues of power sector PSUs-- NTPC, REC and SJVNL are also likely this fiscal. The UPA Government in its second term has already made divestment in two PSUs—NHPC and Oil India — this fiscal.

Earlier, the government had set up an inter-ministerial group under the Finance Ministry for advising it on the sale process of NMDC.