The government has appointed five merchant bankers for selling its 10% stake in the country's largest iron ore miner NMDC.
"The Department of Disinvestment, Ministry of Finance, Government of India has appointed...Merchant bankers to divest 10% paid up equity capital of NMDC Ltd out of its shareholding of 90%," the mining major said.
The merchant bankers finalised are: Citigroup Global Markets India Pvt Ltd, Mumbai; Goldman Sachs (India) Securities Pvt Ltd, Mumbai; Enam Securities Pvt Ltd, New Delhi; DSP Merrill Lynch Ltd, Mumbai; and ICICI Securities Ltd, New Delhi, it said in a filing to the BSE.
The stake sale will take place through "Offer for Sale by promoters through the stock exchanges" (OFS) method," NMDC said.
The government last month had approved 10% stake sale in NMDC that could fetch the exchequer over Rs 7,000 crore.
The Cabinet Committee on Economic Affairs (CCEA) had on October 25 cleared sale of about 39 crore equity of NMDC of face value of Rs 1 each through the OFS route.
At present, the government holds 90% stake in the National Mineral Development Corporation (NMDC).
As of March 31, 2012, the paid up equity capital of NMDC stood at Rs 396.47 crore.
After disinvestment through the OFS (auction) method, the government holding in the Navratna entity will come down to 80%.
NMDC has reported a nearly 15% decline in its net profit at Rs 1,678.62 crore for the quarter ended September 30, 2012, largely due to lower production and fall in sales.
Shares of NMDC closed at Rs 183.90 apiece, up 0.88% on the BSE today.
NMDC, under administrative control of the Ministry of Steel, is primarily engaged in the business of iron ore mining.
But it is also expanding its activities towards production of steel and other value added products. It is India's largest producer of iron ore, operating two mining complexes in Chhattisgarh and one in Karnataka.
Although the government had earlier proposed stake sale in NMDC, it postponed the decision because of poor market conditions.
The government plans to raise Rs 30,000 crore from disinvestment during the current financial year. However, it has not been able to come out with any public issue during the first six months of the fiscal.
Due to uncertain market conditions, the government in the last fiscal could raise only Rs 14,000 crore from disinvestment against the target of Rs 40,000 crore.