Employees of public sector undertakings (PSUs) will now get an option to subscribe up to 5% of the issue size at a discount after the completion of disinvestment in the concerned state-owned company.
Seeking to encourage employee participation in the PSU disinvestment process through offer-for-sale issues,the department of divestment (DoD) had sought Sebi approval for allotting shares to employees at a discount of 5% to the last cut-off price. Sebi has concurred with disinvestment department’s scheme of Employee OFS. We will be selling shares to interested employees at a 5% discount over the last cut-off price in that OFS, a senior government official told PTI.
The government had sought the views of the capital market regulator as it wanted to allot shares to employees as part of the forthcoming OFS of NHPC. The government was originally considering reserving 10% of the OFS size for employees and allotting them shares at a discount of 10% to the cut-off price. The government intends to divest 11.36% stake in NHPC,which has an employee strength of 10,419.
Meanwhile,the employees of companies in which OFS issues were undertaken after December 2012 would be given the option to buy shares,with 5% of the issue size to be offered to them. To start with,the DoD will offer shares to employees in Nalco,Oil India and Rashtriya Chemical and Fertilisers,and this would be followed up with SAIL,MMTC and all subsequent disinvestments. The employee will have to bid for a minimum of 10 shares up to a maximum value of up to Rs 2 lakh, the official said,adding that they should have a demat account.
As per the proposal approved by Sebi,all permanent and full time employees of such companies and working in India would be eligible for allotment of shares. The list of eligible companies would be provided to the DoD.
The share sale offer for employees would remain open for seven working days and the payment would have to be made at the time of applying for shares. We wanted to give employees an opportunity to participate in government stake sale programme. We expect demand from employees in those companies where the share price has gone up substantially post disinvestment, the official added.
(With PTI inputs)