Government to sell 5% stake in Dredging Corp

Mumbai: The government on Wednesday announced it will sell 5% of its stake in Dredging Corp. of India Ltd in an offer for sale as part of its divestment programme. The offer will open on 21 August, the firm said in filing to the stock exchanges.

The government is looking to sell up to 1.4 million shares through the issue. It holds 78.56% stake in the firm. The share sale may fetch ₹ 60.6 crore based on the 15-day average price of the stock at ₹ 433.45.

The floor price will be announced on 20 August. SBICAP Securities Ltd and IDBI Capital Market Services Ltd are managing the offer.

This will be the third divestment issue by the government in this financial year. Earlier, it had divested its stake in Rural Electrification Corp. Ltd (REC) and Power Finance Corp. Ltd (PFC). While PFC raised ₹ 1,600 crore last month, REC raised ₹ 1,610 crore in April.

Also, earlier this month the government appointed merchant bankers for divestment of 10% stake in Indian Oil Corp. Ltd. The divestment of its stake in Indian Oil could see the government raise up to ₹ 9,300 crore.

The government is also looking to appoint bankers for divesting stake in Coal India Ltd, which could help the government raise up to ₹ 23,000 crore, Mint reported on 12 August.

Receipts from stake divestments have been estimated at ₹ 41,000 crore this year. Also, additional resource mobilization of ₹ 28,500 crore has been estimated from the strategic divestments to meet revenue shortfall.

In 2014-15, the government had set a target of ₹ 63,425 crore through stake sales, of which it collected only ₹ 31,350 crore, including ₹ 5,000 crore from the sale of special drawing rights to Reserve Bank of India.

Shares of Dredging Corp. closed the day at ₹ 406.60, up by 0.07% on the BSE, while the the benchmark Sensex closed at 27,934.61 points, up by 0.36%.