New Delhi: The government on Thursday raised over Rs1,200 crore through the sale of 9.2% stake in National Aluminium Company Ltd (Nalco) as both retail and institutional investors lapped up the shares offered to them.
The first PSU disinvestment of the current fiscal, Nalco also saw the government exercising the option to retain excess subscription, called greenshoe option. The government had hit the market on Wednesday with 5% shares on offer, and exercised the greenshoe option after seeing investor demand on day one of the offer for sale.
With bids, over 1.84 times the shares on offer, the subscription of institutional investors was valued at Rs954 crore. Retail investors on their part bid for 3.17 times the shares reserved for them valued at Rs250 crore. Together, the bids are valued at over Rs1,200 crore. Of its total holding of 74.58% in Nalco, the government has offloaded 9.2% at a floor price of Rs67.
Department of Investment and Public Asset Management (DIPAM) secretary Neeraj Gupta said the government was confident of retail investor demand and hence had exercised the greenshoe option keeping in mind the last four disinvestments. “Today’s response validates our market assessment,” Gupta said.
The OFS opened for retail investor subscription on Thursday and was lapped up 3.17 times. Retail are defined as individuals who place bids for sales of total value of not more than Rs2 lakh in aggregate and are offered 5% discount over the issue price. The Nalco stock closed at Rs68.10, up 0.52% over its previous close, on BSE.
Nalco is the first disinvestment of the current fiscal, which started on 1 April. The government has set a target of Rs46,500 crore through minority stake sale and Rs15,000 crore from strategic disinvestment in 2017-18. In 2016-17, the government had raised over Rs46,247 crore from disinvestment.