Neyveli share sale fully subscribed, govt gets about `350 crore
2 min read 02 Aug 2013, 02:36 PM ISTGovt sold over 3.56% stake in NLC through an IPP at a price band of `58-60 a share
Premium(00 am, as per data available on the BSE.)
New Delhi: The government’s 3.56% stake sale offer in Neyveli Lignite Corp. Ltd (NLC) got fully subscribed to fetch around ₹ 350 crore to the exchequer within an hour of opening of trade.
The Centre was selling over 59.7 million shares, or 3.56% stake, in NLC through an Institutional Placement Programme (IPP) at a price band of ₹ 58-60 a share. Sources said mostly the Tamil Nadu-based state PSUs bid for the share sale and preference would be given to them while allotment as per exemption received from the Securities and Exchange Board of India (Sebi).
The issue received bids for over 61.2 million shares as against 59.7 million on offer as of 11:00 am, as per data available on the BSE. Earlier this month, market regulator Sebi had given go- ahead to the disinvestment department’s proposal to give preference in share allotment to those PSUs located in states in which Neyveli’s generating units were located.
Shares of NLC were trading at ₹ 55, down 1.26% over previous close on the BSE.
The Tamil Nadu government has been insisting that it would buy the entire central government stake that is being divested in the state lignite mining and power producing company and had written to Prime Minister Manmohan Singh in this regard last month.
The TN government has said it has five state PSUs which can be qualified as QIBs (Qualified Institutional Buyer). The DoD has sought exemption from Sebi so that preference is given to allot shares to these PSUs only.
Post stake sale, Government’s holding in the PSU would come down to 90%. Credit Suisse Securities (India), ICICI Securities and SBI Capital Markets are acted as merchant bankers for the issue. Besides, the government is also selling stake in State Trading Corporation of India Ltd (STC) and India Tourism Development Corp. (ITDC) through an offer for sale, which would fetch ₹ 3,453 crore to the exchequer.
While the base price for ITDC has been fixed at ₹ 70 apiece, that for STC has been fixed at ₹ 74 apiece. While the sale of 5% stake, or 42.88 crore shares, in ITDC would fetch over ₹ 3,000 crore, about ₹ 454 crore would come from disinvestment of 1.02%, or 6.13 crore shares in STC at the base price set by the government.
Government currently holds 92.11% stake in ITDC and 91.02% stake in STC. The stake sale would help the three companies meet the minimum 10% public holding norm of market regulator Sebi.
The government is required to bring down its stake in these two companies to 90% by 8 August.
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