NLC stake sale to earn exchequer Rs 750 cr

The Centre's 5 per cent stake sale in NLC India (NLCIL), formerly Neyveli Lignite Corporation, is set to garner it Rs 750 crore following a good response from retail investors, an official statement said on Thursday.

"The government is likely to raise Rs 750 crore through disinvestment of 5 per cent of paid-up equity shares of NLC India Ltd through Offer for Sale (OFS) mechanism," a Finance Ministry statement here said.

"The retail portion was subscribed 2.9 times," it said.

On the final day of the two-day OFS, retail investors were offered the shares at a discount of 3.5 per cent over cut-off price for the non-retail category. The cut-off price for the retail category was at Rs 95.80 a share, while for non-retail shares it was Rs 94.60.

The government had approved disinvestment of 3 per cent equity shares of NLC as base offer, with option to retain over subscription up to an additional two per cent equity shares.

The stake sale in NLCIL got off to a good start earlier, with the portion reserved for institutional investors being massively oversubscribed on the first day on Wednesday.

Trading for the non-retail portion took place at a floor price of Rs 94 per share, a ministry statement said.

"Against the offer size of 3.67 crore, bids were received for 11.63 crore shares, resulting in over subscription by 3.19 times," it said.

Thus the bids for the 11.63 crore shares were worth a little over Rs 1,000 crore.

"Government accordingly decided to retain the over-subscription by revising the total offer size from 3 per cent to 5 per cent of equity shares," the statement added.

After this disinvestment, government shareholding in NLCIL will come down to a little more than 84 per cent.

Economic Affairs Secretary Subhash Garg said on Tuesday that the government had accomplished disinvestment worth Rs 20,000 crore during the current financial year and hopes to exceed the fiscal's divestment target of Rs 72,500 crore.

--IANS

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