The government today approved disinvestment in manganese miner MOIL through public offer, where Centre will offload 10 per cent equity, in addition to 5 per cent each by Madhya Pradesh and Maharashtra.
In all, the Nagpur-based company will see a total disinvestment of 20 per cent.
Post the share-sale, Centre's equity in MOIL will come down to 71.57 per cent, while that of Maharashtra government will reduce to 4.62 per cent. Madhya Pradesh government will be left with 3.81 per cent share in the company.
"This (Initial public offering) will lead to Manganese Ore India Ltd (MOIL) listing its shares in the stock exchanges ...Following the disinvestment, the government of India shares in the company will come down to 71.57 per cent," Home Minister P Chidambaram said after the meeting of Cabinet Committee on Economic Affairs, which cleared the stake sale.
About the timing of the IPO, Chidambaram said, "It will depend on the market conditions. The empowered Group of Ministers will take a final decision."
Sources said, meanwhile, that the public issue may be in the first week of December.
"Pricing will be decided by the government later," Chidambaram said, adding that the book value of the company was Rs 99.84 a share as on March 31.
According to an official statement, MOIL employees will get shares at 5 per cent discount to the offer value, under their quota. Retail investors will also get 5 per cent discount.
At present, the Union government holds 81.57 per cent in the company; Maharashtra, 9.62 per cent and Madhya Pradesh, 8.81 equity.
Meanwhile, an official source said that the company's board is scheduled to meet tomorrow to "take forward the disinvestment programme."
The Centre has shortlisted IDBI Capital, Edelweiss Capital and JP Morgan to manage the public issue. Fox Mandal has been shortlisted as the legal advisors while Adfactors is the communication agency for the IPO.
Manganese Ore operates 10 mines, six of which are located in Nagpur and Bhandara districts in Maharashtra, and four in Balaghat district of MP. It had a net profit of Rs 240 crore in 2009-10, while its net worth stood at Rs 1,587 crore.
MOIL is the third steel PSU in which the government is divesting its stake. After the NMDC stake sale, the follow-on-offer by SAIL is in the pipeline.
The government aims to raise Rs 40,000 crore through divestment this fiscal. The other disinvestment candidates for FY10 include Coal India, MMTC, and Hindustan Copper, this fiscal. Last fiscal it had raised Rs 25,000 crore through stake sale in Oil India, NMDC, REC and NTPC.