On 22 June 2006, The Cabinet Committee on Economic Affairs (CCEA) approved selling of 10 per cent Government equity in Nalco and Neyveli Lignite Corpon (NLC). The Government plans to raise around Rs 2,500 crore in the process. The proceeds of these disinvestments would go to the National Investment Fund (NIF).
In October last year, the Cabinet had approved setting up of the NIF under a three-member board; disinvestment proceeds were earmarked for this fund.
Based on the current price, sale of 10 per cent in Nalco could fetch about Rs 1,400 crore, while Rs 1,100 crore would come from 10 per cent equity sale in NLC. Post-divestment, the Government equity in Nalco would come down to 77.15 per cent from 87.15 per cent.
In NLC, the stake would decline to 83.56 per cent from 93.56 per cent currently. Both the offers would be made through the book building process and the price would be decided in consultations with the lead managers.
As the share price of Nalco is ruling at around Rs 250, the Government has decided to split the shares before the offer to ensure greater participation of retail investors. The Department of Disinvestment would decide on the split ratio after consultations with the Ministry of Mines and Department of Public Enterprises.
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| Posted : 6/23/2006 |
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