Gujarat To Shed 26% Stake In Gmdc

The Gujarat government will offload 26 per cent of its stake in Gujarat Mineral Development Corporation (GMDC) at Rs 130 per share. The Rs 107-crore issue is expected to be open sometime next month and will see the state governments stake in GMDC sliding to 74 per cent from the present 100 per cent.

Valued at Rs 107 crore, the offer is considered to be one of the largest-ever from a state public sector undertaking in recent years. The offer is being lead-managed by SBI Caps, Peregrine Capital and Lloyds Finance. The corporation has earmarked 30 per cent of the issue for foreign institutional investors (FIIs) and non-resident Indians (NRIs). Market sources said nearly 75 per cent of the 82.68 lakh shares on offer will be tied up through firm allotments.

 

GMDC is the second state public sector unit where the Gujarat government is offloading equity. Last year, the state government had put Gujarat State Fertilisers Corporation (GSFC) on the block.

GMDC posted net sales Rs 215.27 crore in 1996-97, a 1.53 per cent rise over the previous years Rs 212.02 crore. Other income stood at Rs 28.59 crore while it posted a net profit of Rs 71.12 crore. Despite a doubling of interest costs and rise in depreciation and tax outgo, the net profit is 82 per cent higher than Rs 39.05 crore in 1995-96.

GMDC is Gujarats largest developer of lignite mines, which is also involved in developing bauxite mines. Among its expansion plans include a 2x125 lignite-based power plant being set up at a cost of Rs 1,174 crore.