NFL share sale subscribed 1.55 times; govt gets Rs 101 cr
New Delhi: The government on Wednesday raised Rs 101 crore from the sale of 3.74 crore shares in National Fertilisers Ltd (NFL) after the issue was lapped up in a weak market.
The offer for sale (OFS) attracted bids for over 5.84 crore shares, or 1.55 times of the 3.74 crore shares offered, according to data from the stock exchanges. The indicative price for the share sale was Rs 27 apiece.
"The issue was over-subscribed 1.55 times and the government will receive approximately Rs 101 crore towards divestment receipts," an official statement said.
Sources said most of the bids came from insurance companies, banks and other financial institutions, while retail participation was negligible.
Stock markets on Wednesday fell in the first half of trade amid rupee weakening to near record low levels. The BSE Sensex closed flat to end at 19,345.70 points.
Mirroring the weak broader sentiment, the NFL scrip touched a low of Rs 25.25, a decline of 5.43 percent from the previous close on the BSE. The stock later recovered and closed 1.12 percent higher at Rs 27, amid good response to the OFS.
The government set the floor price for the issue at Rs 27 apiece, which was higher than yesterday's close of Rs 26.70.
The stake sale helped the government lower its stake in the company to 90 percent and comply with Sebi norms on public holding.
IDBI Capital Markets acted as merchant banker for the share sale.
The paid-up equity capital of the company, as on March 31, 2012, was Rs 490.58 crore.
The government proposes to raise Rs 40,000 crore by way of disinvestment in the current fiscal and has raised over Rs 929 crore through stake sales in Hindustan Copper, MMTC and on Wednesday's NFL.