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Friday, Oct 29, 2004

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Govt plans to sell 10 pc stake in Rashtriya Chem

Archana Chaudhary

Mumbai , Oct. 28

AFTER the resounding success of NTPC's initial public offer, the Union government is considering selling 10 per cent stake in Rashtriya Chemicals and Fertilizers Ltd (RCF) in the open equities market.

According to sources, Mr R. Poornalingam, Secretary, Disinvestment Department, Ministry of Finance, met the RCF management a few weeks ago to discuss the sale. The government owns 92.5 per cent of the company's Rs 551-crore paid-up equity capital.

"The purpose of the meeting was to ascertain the strengths, weaknesses and potential of the company. The Secretary also wanted to know the management's outlook about a possible divestment of government stake in RCF," the source said.

When contacted, Mr M. Sundararaman, Director (Finance), confirmed that the Secretary had met the management but said the company had not received any official communication about sale of government equity.

The sale could be similar to that of NTPC's 5 per cent that fetched more than Rs 2,500 crore for the government and saw record participation from retail as well as institutional investors.

The RCF stock on Thursday closed at Rs 31.30, or 3.8 per cent lower than its previous close on the BSE. On Wednesday, the company said its second-quarter net profit fell over 55 per cent to Rs 36.8 crore over the corresponding quarter of the previous year. At Thursday's price, the company has a market capitalisation of Rs 1,727 crore.

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