BackNBCC share sale draws strong interest from institutional investors
Institutional investors had bid for nearly 110.82 million shares, or one-and-a-half times the 72 million shares reserved for them
Premium
Mumbai: The government’s offer to sell a 15% stake in state-run construction company NBCC India Ltd has drawn strong interest from institutional investors.
Institutional investors had bid for nearly 110.82 million shares, or one-and-a-half times the 72 million shares reserved for them, as of 3.30 pm on Thursday, data from stock exchanges showed.
Retail investors, for whom 18 million shares or 20% of the offering has been reserved, will be able to bid on Friday as per NBCC’s stock exchange filing on Wednesday.
The floor price for the offer was set at Rs246.50 a share.
The strong institutional participation would ensure that the government will raise at least Rs2,200 crore from the sale after which its stake in the company will fall to 75% from the 90% it held at the end of September.
NBCC shares closed at ₹ 51.15 on the Bombay Stock Exchange on Thursday, down 0.73% from the previous close. The stock opened at ₹ 49 and touched a high of ₹ 53.75 and a low of ₹ 246.90 in high-volume trading.
With this share sale, NBCC will become compliant with Securities and Exchange Board of India (Sebi) norms which mandate that all public sector units, except state-owned banks, should have public shareholding of at least 25%.
Sebi had introduced minimum public shareholding norms about two years ago to promote a wider investor base in state-run companies and also to boost the government’s efforts to raise funds through disinvestments.
The centre aims to raise Rs56,500 crore by selling stakes in state-owned enterprises in 2016-17, of which Rs36,000 crore will come from minority stake sales and Rs20,500 crore from strategic stake sales. This is 19% lower than last year’s target.
For fiscal 2016, the government had set a record target of raising Rs69,500 crore through disinvestment comprising Rs41,000 crore from minority stake sales and Rs28,500 crore from strategic sales.
The centre later trimmed its target by roughly 57% to Rs30,000 crore, citing volatile market conditions. However, the amount finally garnered was even lower.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
