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Nachiket Kelkar
Nachiket Kelkar

DISINVESTING

In first divestment of FY18, government sells 10% stake in Nalco

nalco (File) NALCO logo

The government's disinvestment plans for 2017-18 started on a positive note, with the planned offer for sale (OFS) to offload close to 10 per cent stake in National Aluminium Company getting fully subscribed. The government is expected to raise close to Rs 1,300 crore from the share sale.

The government had set a floor price of Rs 67 for the Nalco share sale. Retail investors were offered an additional 5 per cent discount on the floor price. The shares closed at Rs 68.10 on Thursday, up 0.5 per cent on the BSE. The broader market also ended with gains; the BSE Sensex closed up 0.3 per cent at 29,422.39.

On Wednesday, while 7.73 crore shares were offered for sale to institutional investors, it attracted bids worth 14.24 crore shares, an oversubscription of 1.84 times. On Thursday, about 1.93 crore shares were offered to retail investors, with the portion also getting oversubscribed.

Speaking on news channel ET Now, T.K.Chand, chairman and MD of Nalco said around 9.7 crore shares were offered for sale, which amounted to around 9.2 per cent of the paid up equity share capital.

Post the stake sale the government's stake will come down to about 65.38 per cent from the earlier around 74.58 per cent.

This the first share sale in a state-owned company by the government in the current financial year. The government has set an ambitious target to raise Rs 72,500 crore from divesting stakes in public sector undertakings in the year ending March 31, 2018.

In the previous financial year, the government had raised Rs 46,247 crore, higher than the revised disinvestment target of Rs 45,500 crore. However, it was lower than the budget estimate of Rs 67,000 crore.

Some of the companies in which the government is likely to sell further stake this year include NHPC, NTPC, Power Finance Corp, Indian Oil and Rural Electrification among others. The cabinet had also approved listing of the five state-run general insurance companies, namely, New India Assurance, National Insurance, Oriental Insurance, United India Insurance and the re-insurer General Insurance Corp. 

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