Govt eyes Rs 1,706 cr from 15% stake sale in NBCC

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, on Wednesday approved the sale of 15 per cent stake in state-owned construction firm NBCC (formerly National Buildings Construction Corporation), a move which could add Rs 1,706 crore to the exchequer.

The Centre holds 90 per cent stake in the company, which has a market capitalisation of Rs 13,788 crore. Fifteen per cent of Rs 13,788 crore comes to Rs 2,068 crore.

"The government expects Rs 1,706 crore from this (disinvestment)," Law and IT Minister Ravi Shankar Prasad told reporters.

The actual realisation amount will, however, depend on market conditions and investor interest at the time of disinvestment.

According to an official statement, the Centre has decided to allot additional shares to the eligible and willing employees at a discount of five per cent to the issue/discovered (lowest cut-off) price of the offer for sale.

According to the Securities and Exchange Board of India's guidelines, the minimum public holding in a listed company has to be maintained at 25 per cent.

NBCC was listed on the bourses in 2012 when the government diluted 10 per cent stake to raise Rs 124.97 crore. The company has split its share of Rs 10 each into five with a face value of Rs 2 each.

Finance Minister Arun Jaitley has budgeted a disinvestment target of Rs 56,500 crore for FY17. Of this, Rs 36,000 crore is to come from minority stake sale in public sector firms and Rs 20,500 crore from strategic sale.