The Government will sell over 3.5 per cent shares of Neyveli Lignite Corporation (NLC) at the price band of Rs 58-60 on August 2.

An Empowered Group of Ministers (EGoM) approved the price band for selling 5.58 crore shares of NLC. It will be conducted through an institutional placement programme in which Tamil Nadu-based state entities would be given preference. The Government is likely to mop up Rs 324-335 crore through the share-sale. Shares of NLC slipped nearly 5 per cent to close at Rs 54.35 on the BSE on Wednesday.

Earlier this month, the market regulator SEBI had given the go-ahead to the disinvestment department’s proposal to give preference in the share allotment to PSUs located in the States in which Neyveli’s generating units were located.

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 State Government has said it has 5 State PSUs which can be qualified as Qualified Institutional Buyers. The Department of Disinvestment has sought exemption from SEBI so that preference is given to allot shares to these PSUs only.

The Central Government currently holds 93.56 per cent stake in NLC and the share sale is being done to meet the minimum public shareholding norm set by the Securities and Exchange Board of India. According to the norm, all listed central public sector units should have a minimum 10 per cent public shareholding by August 8.

NFL issue sails through

Meanwhile, the Finance Ministry has said that the issue of National Fertilizers Ltd was oversubscribed 1.55 time, with the Government mopping up Rs 101 crore. The Government divested 7.64 per cent of NFL’s equity base through the offer-for-sale or auction method. With this, the company has been able to meet SEBI’s minimum public shareholding norm.

Shares of NFL closed over 1 per cent up at Rs 27 on the BSE on Wednesday.

The Government proposes to raise Rs 40,000 crore by way of disinvestment in the current fiscal. So far in the current fiscal it has raised over Rs 900 crore.