Govt to sell 20% stake in National Fertilizers Ltd through OFS
The government holds 74.71% stake in National Fertilizers LtdThe deadline for submission of bids for both legal adviser and merchant banker for the OFS ends at 3 pm on 2 March
The cental government has decided to sell 20% stake in National Fertilizers Ltd (NFL) through an offer for sale. The Department of Investment and Public Asset Management (DIPAM) has invited tenders from merchant banks for the sale process. "The GoI intends to disinvest 20% paid up equity capital of NFL out of its shareholding of 74.71%, through 'Offer for Sale' (OFS) method of shares by promoters through the stock exchanges' as per Securities and Exchange Board of India (SEBI) Rule and Regulations," said a notification by the department.
It is the second largest producer of Urea in the country with a share of about 15% of total Urea production in the country. At the current market price, selling 20% stake in National Fertilizers Ltd can fetch about ₹400 crore to the exchequer.
The Centre is also considering allotting shares to eligible and willing employees of NFL at a discount on the issue or discovered price — lowest cut off price — up to a maximum of certain percentage of the OFS size subsequent to completion of the transaction under OFS.
DIPAM has also sought tenders from "law firms with experience and expertise in public offerings and OFS in capital market to act as legal advisers and assist the government in the process." "The Domestic Law Firm will act as the Legal Adviser to the transaction and submit Proposals in consortium with an International Law Firm of repute, with similar experience and expertise in Public Offerings/OFS in capital markets," it added.
The deadline for submission of bids for both legal adviser and merchant banker for the OFS ends at 3 pm on 2 March.
Incorporated in 1974, the NFL has an authorised capital of ₹1,000 crore and a paid-up capital of ₹490.58 crore. The government holds 74.71% stake in the company. At least 25.29% shares are held by financial institutions and others.
NFL has five gas based ammonia-urea plants — Nangal and Bathinda plants in Punjab, Panipat plant in Haryana and two plants at Vijaipur, Madhya Pradesh. The company currently has a total annual installed capacity of 35.68 LMT of Urea (re-assessed capacity of 32.31 LMT). During 2020-21 (April-September) the company reported a net profit of 198 crore.
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