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Business News/ Politics / Policy/  EGoM to decide on Nalco stake sale floor price on Monday
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EGoM to decide on Nalco stake sale floor price on Monday

Stake sale would happen through offer for sale or auction route

The aluminium major reported a more than two-fold jump in its October-December quarter net profit to `118.94 crore, on the back of improved sales. Photo: Mint (Mint)Premium
The aluminium major reported a more than two-fold jump in its October-December quarter net profit to `118.94 crore, on the back of improved sales. Photo: Mint
(Mint)

New Delhi: An inter-ministerial panel is likely to decide on Monday the floor price for 12.5% stake sale in Nalco, which can fetch around 1,400 crore to the exchequer at current rates.

The empowered group of ministers (EGoM) on disinvestment, headed by finance minister P Chidambaram, is scheduled to meet on Monday to decide on the base price for the share sale, sources said.

The share sale is likely to hit the markets on 13 March, they added. The Department of Disinvestment (DoD) has held roadshows in Singapore, Hong Kong, Japan, the US and the UK on 19 February for disinvestment of the state-run aluminium company.

The sale of 12.5% stake, or 313.10 million shares, of Nalco is expected to fetch around 1,400 crore to the exchequer at the current market price.

Shares of Nalco on Friday closed at 44.90, up 3.70% on the BSE.

The government currently holds 87.15% stake in Nalco. The government had in November last year deferred disinvestment of Nalco citing poor second quarter performance which raised valuation concerns, and said the stake sale would happen only after the third quarter results.

The aluminium major reported a more than two-fold jump in its October-December quarter net profit to 118.94 crore, on the back of improved sales. The National Aluminium Company (Nalco) had a profit of 51.22 crore in the same period last fiscal.

“We expect to get good valuation of Nalco. Last time, the merchant bankers advised to defer the offer to March quarter. This time we want to do it only when the market is stable," sources said.

Enam Securities, SBI Caps and IDFC are merchant bankers for the Nalco disinvestment. The cabinet committee on economic affairs (CCEA) had in September approved disinvestment in the Navratna PSU. Following the stake sale, the government’s holding will come down to 75% in the company.

The stake sale would happen through the offer for sale (OFS) or auction route. The paid-up capital of the company as on March 2012 stood at 1,288.62 crore.

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Published: 10 Mar 2013, 02:05 PM IST
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