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Mumbai: The government on Thursday said it will sell stakes in state-run Rashtriya Chemicals and Fertilizers Ltd (RCF) and National Fertilizers Ltd (NFL), according to details available on the website of the Department of Divestment.

The government will sell its stake through the offer-for-sale (OFS) route, the website said.

The proposed divestment in RCF will see the government pare its holding in the company by 5%. As of 31 March, the government held 80% in the fertilizer maker.

At a 15-day average stock price of 43.54, the divestment will see the government raise approximately 120 crore from the RCF offer for sale.

RCF is in the business of manufacturing and marketing fertilizers, industrial chemicals such as methylamines, ammonium bicarbonate and ammonium nitrate from its two operating units in Maharashtra.

In the case of NFL, the government plans to bring down its stake by 15%. It currently holds around 89.71% in the company. The divestment will fetch the government approximately 226 crore, based on a 15-day average share price of 30.69.

NFL manufactures urea at its plants at Panipat and Bathinda. It is the second largest producer of urea, with a total share of 15.5% and the largest urea producer amongst public sector companies. The company also produces bio-fertilizers.

The divestment announcement in the two fertilizer manufacturing companies follows similar announcements in recent days.

On Tuesday, the government announced that it will sell an 11.36% stake in state-owned hydropower producer NHPC Ltd through a two-day OFS. The sale process which began on 27 April and is yet to close will help the government raise 2,700 crore. Also, on Tuesday, the government said that it will divest 10% stake in Oil India Ltd.

On 22 April, the government had announced its intention to sell 10% stake in iron ore mining company NMDC Ltd through an OFS.

In 2015-16, the government mobilized about 18,277 crore through divestments in companies like Container Corp. of India, NTPC Ltd, Rural Electrification Corp. Ltd, Power Finance Corp. Ltd, India Oil Corp. Ltd, Dredging Corp. of India Ltd and Engineers India Ltd.

In his budget speech in February, finance minister Arun Jaitley had said that the government aims to raise 56,500 crore by selling stakes in state-owned units in 2016-17, of which 36,000 crore will come from minority stake sales and 20,500 crore from strategic stake sales. This is 19% lower than the 69,500 crore the government had targeted in the last budget. That target was later scaled down.

At 1.25pm, shares of RCF were trading at 47.20 on BSE, down 2.68%, while shares of NFL were trading at 31.45, down 1.72%. The benchmark Sensex fell 1.01% to 25,801.5 points.

ABOUT THE AUTHOR

Swaraj Singh Dhanjal

" Based in Mumbai, Swaraj Singh Dhanjal is responsible for Mint’s corporate news coverage. For the past eight years he has been writing on the biggest deals in private equity, venture capital, IPO market and corporate mergers and acquisitions. An engineer and an MBA, he started his journalism career in 2014 with Mint. "
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