NMDC FPO price-band to be fixed on 8 March; issue opens 10 March

NMDC FPO price-band to be fixed on 8 March; issue opens 10 March
PTI
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First Published: Thu, Mar 04 2010. 05 57 PM IST
Updated: Thu, Mar 04 2010. 05 57 PM IST
Mumbai: Navratna public sector unit NMDC Ltd plans to tap the capital market with its FPO, offering for sale of shares for cash at a price to be determined by the book-building process.
The issue is slated to hit the market on 10 March and close on 12 March. The price-band will be fixed on 8 March.
The FPO comprises a net offer to the public of 330,500,000 equity shares of face value of Re1 each. It shall constitute up to 8.38% of the post-offer paid-up equity share capital of the mining company.
“The company has decided to offer a discount of 5% to the offer price for retail individual bidders and eligible employees,” NMDC chairman and managing director Rana Som told reporters here on Thursday.
The proceeds of the issue will be used to fund the mining giant’s capex programme.
“The company has taken up a capex of Rs26,500 crore over the next five years. The company plans to expand and establish its presence as an integrated producer of iron and steel through selective value-addition projects,” Som said.
NMDC has signed an MoU with the Chhattisgarh government to develop a steel plant with a capacity of 3 million tonnes per annum at Jagdalpur with an investment of Rs15,500 crore.
“We also have plans to develop a steel plant in Karnataka,“ Som said.
The company expects to complete its acquisition of Sponge Iron India Ltd soon, he said.
NMDC also plans to develop two pellet plants at a cost Rs1,500 crore in Karnataka and Chhattisgarh.
“These projects will be financed through internal accruals as the company will have a cash balance of Rs13,000 crore as on 1 April, he said.
The price-band and minimum bid lots will be decided by the selling shareholders in consultation with the book-running lead managers (BRLMs), Som said.
The BRLMs to the issue are UBS Securities, Citigroup Global Markets, Edelweiss Capital, Kotak Mahindra Capital, Morgan Stanley India Co and RBS Equities India.
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First Published: Thu, Mar 04 2010. 05 57 PM IST
More Topics: NMDC | FPO | India | Rana Som | UBS Securities |