Govt raises $116 million from NALCO stake sale

 

Government raised approximately Rs 626 croreby selling shares in state-run National Aluminium Co Ltd (NALCO) on Friday, taking the government closer to its fund raising target to reduce the budget deficit.

The single-day NALCO auction received bids for a total of 156.94 million shares, at a weighted average price of Rs 40.05, stock exchange data showed. The government's holding in the company will come down to 81%.

New Delhi was selling 128.86 million shares or a 5% stake, with an option to sell 5% more, at a minimum offer price of Rs 40 a share.

The share sale is part of the government's divestment drive to help restrict the fiscal deficit to 5.2% in the year ending March 31, to avoid becoming the first of the BRIC economies to have its credit rating downgraded.

Including the NALCO issue, the government has raised nearly $4.1 billion through the sale of shares in state-owned companies so far this fiscal year.

It expects to launch this month a 10.82% stake sale in steelmaker Steel Authority of India Ltd that could raise about $550 million, taking it close to its divestment target of $4.4 billion for the fiscal year.

NALCO, India's third-largest producer of aluminium, operates an alumina refinery, smelter plant and bauxite mines in the mineral-rich eastern state of Odisha.

Shares in the company, valued at about $2 billion, ended down 8.5% on Friday at 40.35 rupees, in a weak Mumbai market index.