Govt invites merchant bankers for stake sale in OIL, NFL, RCF

New Delhi: Government on Thursday invited bids from merchant bankers to assist in its stake sale in three PSUs — OIL, NFL and RCF — which could fetch around Rs2,260 crore to the exchequer.

The government intends to sell its 15% stake or 7.35 crore shares in National Fertilisers Ltd (NFL) while it will put on block its 5% stake or over 2.75 crore equity shares in Rashtriya Chemicals & Fertilisers (RCF) through offer for sale (OFS). It also plans to sell 10% stake or over 6.01 crore shares in ‘Navratna’ Oil India Ltd.

At the current market price, sale of OIL shares could fetch over Rs1,900 crore, while that in NFL and RCF could fetch Rs230 crore and Rs130 crore to the exchequer.

The government plans to appoint two merchant bankers for each of NFL and RCF and they will have to apply to the Department of Investment and Public Asset Management by 18 May, as per the Expression of Interest invited by DIPAM.

For OIL, it is looking at appointing three merchant bankers. Government holds 89.71% shares in NFL and 80% in RCF and 67.64% in OIL.

RCF, a mini-ratna Central Public Sector Enterprise, is engaged in the business of manufacturing and marketing fertilisers. The company’s paid up capital stands at Rs551.69 crore.

NFL, a mini-ratna CPSE under the administrative control of Ministry of Chemicals & Fertilisers, is the second largest producer of urea. The company has a paid up capital of Rs490.58 crore.

OIL is engaged in the business of exploration, development and production of crude oil, Natural Gas and LPG. Shares of NFL were trading at Rs31.50, down 1.56% on the BSE. RCF shares were quoting 2.68% low at Rs47.20. OIL was trading at Rs330.85, up 0.93% on the BSE.

The government is also considering allotting shares to employees of the three PSUs at a discount of up to 5% to the issue. The employees will be eligible to apply for shares up to Rs2 lakhs only. It has pegged disinvestment target at Rs56,500 crore for this fiscal. Of this, Rs36,000 crore is to come from minority stake sale in PSU and Rs20,500 crore from strategic sale.

The government has kickstarted the disinvestment programme for current fiscal with 11.36% stake sale in NHPC. The government aims to raise Rs2,700 crore from the NHPC share sale, which is open for bidding by retail investors today.