New Delhi: The Finance Ministry has asked the Steel Ministry to give by November 5 its views on the proposed 15 percent disinvestment in mining PSU NMDC, that could fetch the government over Rs 18,000 crore.
"Department of Disinvestment has recommended 15 percent disinvestment in NMDC and sought Steel Ministry's response on it by November 5. If the steel ministry does not respond by then, it will be construed that they approve of Disinvestment Department's recommendation," a senior steel ministry official told reporters.
At present, the steel ministry is studying the proposal sent by the Disinvestment Department and will forward its suggestions, if any, before the stipulated time, he added.
Another official in the ministry ruled out a follow-on public offer (FPO) by the company along with the proposed disinvestment. But, he was non-committal when asked if the planned stake sale could happen in phases.
"NMDC does not need money at present, so a FPO is ruled out," he added.
Going by NMDC's current share price, the government could raise around Rs 18,000 crore through disinvestment, which may well be the largest stake sale this fiscal, in terms of revenue to the exchequer, and would aid in financing partly its social sector programmes.
Shares of the firm closed 0.37 percent down to Rs 299.65
on the Bombay Stock Exchange on Friday.
In August, the Steel Ministry had sent its proposal to sell 8.38 percent of government equity in the country's largest iron ore miner, which has a market cap of about Rs 118,000 crore on the basis of Friday's closing.
With the disinvestment department recommending 15 percent stake sale in NMDC, the government's equity in the company is set to fall from present 98.38 percent to 83.38 percent. Currently, institutional investors hold 1.62 percent stake in the firm.
"If everything goes on track, the matter regarding disinvestment in SAIL and NMDC--top two PSUs under the steel ministry-- the Cabinet Committee on Economic Affairs could be moved by the end of next month," the official added.
The disinvestment department has already given its in-principle approval to a 20 percent disinvestment plan in SAIL in two phases.
The steel ministry has also sent a proposal to the finance ministry for divesting 10 percent stake in its other PSU, Manganese Ore (India) Ltd.
Bureau Report
First Published: Sunday, November 01, 2009, 13:05