Nalco stake sale commences on bourses,scrip tanks 8

On the BSE,Nalco scrip hit a low of Rs 44.50,down 8.36 per cent over previous close,soon after the start of market hours. It continued to trade in the range of Rs 40.55-41.90 in the early hours,higher than the base price.

At the floor price of Rs 40,a 10 per cent stake sale in Nalco could garner around Rs 1,031 crore to the exchequer.

The Empowered Group of Ministers EGoM on disinvestment,headed by Finance Minister P Chidambaram,had on Wednesday cleared stake sale of 25.77 crore shares,or up to 10 per cent,in Nalco through the Offer For Sale OFS.

The government is selling 5 per cent stake,with an option to retain another 5 per cent of the over-subscription.

The number of shares on offer is lower than what the Cabinet Committee on Economic Affairs CCEA had approved for in September last year. The CCEA had cleared a 12.5 per cent stake sale in the Navratna PSU.

The Department of Disinvestment DoD has held roadshows in Singapore,Hong Kong,Japan,the US and the UK last month for disinvestment of the state-run aluminium company.

At present,the government holds 87.15 per cent stake in Nalco.

The stake sale was deferred in November last year as the government wanted to wait for the company8217;s third quarter earnings to get a better valuation.

Nalco posted a more than two-fold jump in its October-December quarter net profit to Rs 118.94 crore,on the back of improved sales. The company had a profit of Rs 51.22 crore in the same period last fiscal.

Enam Securities,SBI Caps and IDFC are merchant bankers for the Nalco share sale offer.

The government estimates to collect Rs 24,000 crore from disinvestment in the current fiscal and has already raised over Rs 21,800 crore so far.