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Steel ministry approves NMDC disinvestment

Last Updated: Tuesday, August 4, 2009 - 16:57

New Delhi: The Steel Ministry has approved the sale of 8.38 percent of government equity in the blue chip company NMDC that could fetch the exchequer around Rs 12,000 crore.

"We have approved the 8.38 per cent disinvestment of government`s stake in NMDC. We will be sending the proposal to the Disinvestment Department in a day or two (for initiating the process of equity sale)," Steel Secretary P K Rastogi told reporters.

The country`s largest iron ore mining company is one of the most valued Indian firms with a market cap of Rs 1,46,297 crore.
After the disinvestment, the government equity in the NMDC will fall by 10 percent, the minimum that is needed for listing shares of a company on the bourses under the SEBI regulations. Currently, the state-run entity is exempted from this rule.

The government has already offloaded 1.62 percent of its shareholding in the listed entity.

"With the sale of 8.38 percent of its stake, the government is estimated to earn Rs 12,000 crore. The amount can vary based on the share price of the company," he added.

The steel ministry has already sent a proposal to the Ministry of Finance for divesting 10 percent stake in the Nagpur-based Manganese Ore (India) Ltd.

Besides these two PSUs, the finance ministry last month had asked the steel ministry to consider divesting one percent of government equity in the ailing Kudremukh Iron Ore Company, a listed entity.
However, the steel ministry decided against any further dilution of equity in the sick company, citing its bad health.

Apart from the PSUs under the steel ministry, the government is learnt to have identified MMTC, Coal India Ltd, Hindustan Copper, Oil India Ltd and NHPC for disinvestment.

Bureau Report

First Published: Tuesday, August 4, 2009 - 16:57

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