Govt raises Rs 310 crore through RCF stake sale

The government on Friday raised Rs 310 crore from sale of 12.5 percent stake in Rashtriya Chemicals and Fertilisers Ltd (RCF) in an offer for sale that managed full subscription barely minutes before the markets closed.

New Delhi: Government on Friday raised Rs 310 crore through stake sale in Rashtriya Chemicals & Fertilizers Ltd (RCF), the fifth disinvestment this fiscal, which got over-subscribed 1.3 times.

"The Government will receive about Rs 310 crore from the sale proceeds. The issue was subscribed by all categories of investors, including retail investors," the Finance Ministry said in a statement.

The share auction received bids for over 8.89 crore shares, a demand of 1.3 times against an offer of over 6.89 crore, as per data on stock exchanges.

The indicative price, which is the weighted average price of all valid bids, was Rs 45.02 a share. At this price, the government would garner at least Rs 310 crore.

With the RCF issue going through, the government has raised Rs 21,814 crore so far in the current fiscal, against a target of Rs 24,000 crore.

It has also lined up three more companies -- NALCO, MMTC and SAIL -- for disinvestment by March end.

The proceeds from stake sale would help government bridge its fiscal deficit, which would be around 5.2 percent in the financial year ending March 31.

Shares of RCF closed at Rs 45.45, up 3.65 percent over its previous close on BSE. The scrip had touched a high of Rs 46.40 in early trade.

The government had fixed the floor price for the 12.5 percent share auction of RCF at Rs 45 apiece, which is at a 2.6 percent premium to yesterday's close of Rs 43.85.

The government's stake would now come down to 80 percent, from 92.5 percent post the Offer for Sale (OFS).

"The divestment was carried out to make the company compliant to the mandatory public shareholding requirements," the statement said.

Bids for over 2.21 crore shares were with 100 per cent margin, meaning if the bidder decides to withdraw later they can do so. Bids that came in with zero per cent margin were over 6.68 crore shares, according to the NSE data.

ICICI Securities and IDBI Capital Markets acted as the merchant bankers for the RCF share sale.

So far this fiscal, the government has pared minority stake in four PSUs -- Oil India, NTPC, NMDC and Hindustan Copper Ltd.