New Delhi: The government Wednesday deferred 12.5 percent stake sale in Nalco saying the company's second quarter financial performance is not reflective of the true financial position of the aluminium major.
"Nalco disinvestment will happen next quarter (January-March quarter). It is deferred for now. There is need to strengthen the financial performance of the company further," Mines Minister Dinshaw Patel said.
He was talking to reporters after a meeting of the Empowered Group of Ministers (EGoM) here.
Further discussion on Nalco disinvestment would happen again between January 7-15, he said.
This is the second postponment in a row. Last month, the government had to defer the public issue of Rashtriya Ispat Nigam Ltd (RINL) as the Steel Ministry felt that the issue price suggested by merchant bankers was less than the book value.
"The Q2 results was not very representative of company's valuation. In October, there is a little visible improvement. So, we decided that it will be good to do it in the third quarter," Disinvestment Secretary Mohammad Haleem Khan said.
"Q2 performance does not represent the intrinsic value. The merchant bankers said that Q2 is an aberration and Q3 is bound to be very good. So after Q3, it will be done," he said.
Enam Securities, SBI Caps and IDFC were acting as merchant bankers for the Nalco disinvestment.
The 12.5 percent stake sale of Nalco was expected to fetch over Rs 1,500 crore to the exchequer at the current market price.
Shares of Nalco closed at Rs 45.9, down 1.08 percent on the BSE over their previous close.
The Cabinet Committee on Economic Affairs (CCEA) had in September approved disinvestment in the Navratna PSU. Following the stake sale, the government's holding will come down to 75 percent in the company.
The Department of Disinvestment (DoD) would opt for the Offer for Sale (OFS) or auction route for selling stake in Nalco.
The government aims to raise Rs 30,000 crore by way of disinvestment in the current fiscal. But with seven months of the fiscal already over, it might find it difficult to meet the target.
Finance Minister P Chidambaram has exuded confidence that the Rs 30,000 crore target would be achieved. During the current fiscal, the government is also planning to sale stakes in Oil India, MMTC, Hindustan Copper, SAIL and NMDC.