New Delhi: The government plans to raise about Rs 250 crore from the initial public offer of the construction firm NBCC, for which it will appoint two merchant bankers by June end.
Currently, government owns 100% in the National Building Construction Corporation (NBCC) and has floated request for proposal inviting bids from investment bankers.
The disinvestment of NBCC has already got in-principle approval and the finance ministry, in consultation with Urban Development Ministry, is currently in the process of preparing a Cabinet note for seeking final approval, sources in the Finance Ministry said.
The government plans to disinvest 10% of its stake in the company.
“We are expecting to mop up somewhere between Rs 200-250 crore. The merchant bankers would put in their bids by 10 June and from there we would finalise two as the managers for the NBCC issue,” they added.
NBCC is likely to be the third PSU to hit the market in the current fiscal as part of the government’s disinvestment plan through which it expects to raise Rs 40,000 crore.
The Cabinet has already given clearance for disinvestment of SAIL, ONGC and HCL, while the government raised Rs 1,162 crore by divesting a 5% stake in Power Finance Corporation in May.
The follow-on public offer of the petroleum exploration major ONGC is expected in July.
NBCC, which is into construction, engineering and project management consultancy services, was incorporated in 1960. As of 31 March, 2011, the paid up capital of the company was Rs 90 crore.
Presently, face value of shares of NBCC is Rs 1,000 apiece. In order to make the shares more affordable to the investors, before the proposed disinvestment the Ministry of Urban Development and the Company would split the shares of face value of Rs 1,000 each into shares of face value of Rs 10 each, sources said.
The company has initiated action in respect of splitting of shares and the process is likely to be completed by the end of June 2011, sources added.