NMDC board okays filing draft prospectus for FPO

State-run mining giant NMDC today said its board has approved filing draft prospectus with market regulator Sebi for its estimated Rs 20,000 crore follow-on public offer.

"The board of directors at its meeting held on January 23 approved the draft red herring prospectus to be filed with SEBI with proposed disinvestment of 8.38 per cent equity capital of NMDC Ltd, out of President of India's shareholding through further public offer," NMDC said in a filing to the Bombay Stock Exchange.

The government will sell 8.38 per cent of stake in the miner. At the Friday's closing price of Rs 532.50, the government will mop up Rs 20,000 crore through share sale. It holds about 98.38 per cent in the Navratna company.

The government will use the proceeds to part fund its various social and infrastructure programmes.

The government plans to complete the FPO by the end of this fiscal.

NMDC, yesterday, reported a 40 per cent decline in net profit at Rs 860 crore for the third quarter ended December 31, 2009. Net sales of the company declined by 32 per cent to Rs 1,587.58 crore for the same quarter.

Shares of NMDC were trading at Rs 534.10 on BSE, up 0.30 per cent from previous close.