The Finance Ministry has initiated the process of disinvesting 10 per cent stake in Hyderabad-based mining company NMDC.

The Department of Disinvestment, under the Ministry, said the government intends to sell 10 per cent or around 40 crore shares. Shares will be sold through the offer for sale route through stock exchanges. OFS is better known as the auction method. On the basis of Wednesday’s closing price of ₹138.25, the government can mop up around ₹5,500 crore.

Currently, the government has 80 per cent holding in the company. The proposed disinvestment will help it fulfil SEBI’s norms of minimum 25 per cent public shareholding in all listed public sector enterprises by 2017. Meanwhile, the disinvestment proposal of NMDC is yet to be taken up by the Cabinet Committee on Disinvestment. It is not sure whether the NMDC disinvestment offer will be taken up in the current financial year ending March 31.

Once cleared, this will be the third disinvestment in the company. The government used the FPO route in March 2010 for the first time when it offloaded 8.38 per cent stake to mobilise ₹9,930.45 crore. In the second instance, in December 2012, the government sold 10 per cent of its holding to mop up ₹5,979.79 crore.

The government has set a target of ₹43,425 crore to be collected through selling stakes in Central PSEs, but so far, it has been able to mop up only a little over ₹1,700 crore through stake sale in SAIL. There is no clarity yet on when two big-ticket disinvestments — ONGC and Coal India — will take place.

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