New Delhi: The government will sell its 10 percent stake, comprising 90 lakh shares, in construction firm NBCC through an initial public offer to raise up to Rs 250 crore in the current fiscal.
"The Union Cabinet today gave its approval for disinvestment of 10 percent of total paid up equity of National Building Construction Corporation (NBCC) out of its total holding through IPO in the domestic market," an official statement said.
The decision was taken by the Cabinet Committee on Economic Affairs (CCEA) in its meeting held today.
The stake sale in NBCC is part of the government effort to raise Rs 40,000 crore from the sale of minority stake in profitable public sector units.
The government currently holds 100 percent in NBCC.
The company's current paid up equity capital is Rs 90 crore, consisting of 9 crore shares of face value of Rs 10 each.
A 5 percent price discount would be offered to retail investors and company employees subscribing to the IPO, the statement said.
The note for the CCEA was prepared by the finance ministry in consultation with the urban development ministry. NBCC, a unit under Ministry of Urban Development, had last month appointed two merchant bankers -- Enam Securities and IDBI Capital -- for managing the stake sale programme.
The Cabinet has already given clearance for disinvestment in SAIL, ONGC and HCL.
So far, this fiscal Rs 1,162 crore has been raised by the government by divesting 5 percent stake in Power Finance Corporation in May.
The government aims to mobilise Rs 95,000 crore between 2011-12 and 2013-14 by selling its equities in state-run enterprises.
The Centre aims to earn Rs 40,000 crore from disinvestment this financial year. This is despite the government not being able to meet its target of Rs 40,000 crore in the last fiscal when total disinvestment proceeds stood at Rs 22,762.96 crore.
First Published: Thursday, August 11, 2011, 22:10