NMDC staff may get share quota under auction route

The department of public enterprises has proposed a cap of Rs 200,000 for allotment of shares to each employee of NMDC at the time of the proposed 10 per cent government stake sale through the auction route.

“The method and procedure of allotment of shares to employees may also provide the maximum value of allotment to any employee which may be kept at Rs 200,000 as applicable in case of IPO/FPO,” a source told PTI.

The department of public enterprises would need Cabinet approval for this as in the normal course companies do not reserve shares for employees under the offer for sale route.

The government plans to divest 10 per cent paid up equity in NMDC through offer for sale of shares through the stock exchanges and is in the process of appointing merchant bankers for the same.

The government currently holds 90 per cent stake in the country’s top iron ore producer after it offloaded 8.38 per cent holding of then 98.38 per cent stake in the company in March, 2010.

Shares of NMDC are currently trading at around Rs 187.65 on the BSE. At the current market prices, a 10 per cent stake sale would fetch the exchequer around Rs 6,500 crore. The government proposes to raise Rs 30,000 crore from disinvestments in current fiscal. However, with five months of the fiscal already over, it has failed to come out with any public offering.

In a bid to accelerate the process of disinvestment, Finance Ministry is expediting the process of PSU stake sale so that issues could hit stock markets in time. Last fiscal, due to volatile market conditions, the government had to postpone divestments. It had raised only Rs 14,000 crore in 2011-12 against a target of Rs 40,000 crore.