Selloff Hopes Ignite Neyveli Lignite

The stock price of Neyveli Lignite Corporation, the state-owned power generation major, today hit the 20 per cent upper limit at Rs 19.65 on hopes that the government's privatisation programme will gather pace ahead of the Union Budget.

The Neyveli Lignite scrip has been surging in the last few trading sessions as part of a broad-based rally in public sector company shares. From a recent low of Rs 10.20 on January 9, the scrip has jumped 92.6 per cent to the current level of Rs 19.65. Traded volumes also have soared to the current 14 lakh shares from 18,000 shares.

It may be recalled that last week the disinvestment commission had recommended that the government should sell 51 per cent of its 94 per cent stake in Neyveli Lignite. Further, the commission has said that if there are obstacles in the way of selling a majority stake, the government should divest at least a 49 per cent stake.

The company has reportedly drawn up plans for over Rs 17,000 crore investments in the next five years. It has a huge equity base of Rs 1,677.71 crore. The company has reported a 32 per cent rise in net profit to Rs 509.80 crore on the back of a 8.65 per cent jump in sales to Rs 509.80 crore in the third quarter ended December 2001.