Govt invites bids from merchant bankers for RCF issue

The government has initiated the process of appointing merchant bankers for managing the 12.5 per cent stake sale in Rashtriya Chemicals and Fertilisers (RCF).

Merchant bankers will have to put in the bids by January 15 for managing the share sale of RCF, the department of disinvestment has said.

Last week, the Cabinet had cleared the 12.5 per cent government stake sale in RCF through the offer for sale (OFS) or auction route. The bidders must have prior experience in managing OFS.

Government holds 92.5 per cent stake in RCF and the paid-up capital of the company is Rs 551.69 crore.

At the current market price of Rs 55.25 a share, the 12.5 per cent stake sale could fetch around Rs 350-360 crore to the exchequer.

The stake sale approval is part of the government’s decision to raise Rs 30,000 crore through disinvestment in the current financial year.

So far in 2012-13, the government has raised over Rs 6,900 crore through minority stake sale in public sector undertakings.

The government has already identified 10 companies, including NTPC, Oil India Ltd (OIL), MMTC, SAIL and BHEL, for disinvestment. The stake sale of OIL is likely in January, followed by NTPC in February.