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NLC stake sale to earn exchequer Rs 750 cr

Author: IANS/Friday, October 27, 2017/Categories: Government

NLC stake sale to earn exchequer Rs 750 cr

New Delhi - The Centre's 5% stake sale in NLC India (NLCIL), formerly Neyveli Lignite Corporation, is set to garner it Rs 750 crore following a good response from retail investors, an official statement said.

"The government is likely to raise Rs 750 crore through disinvestment of 5% of paid-up equity shares of NLC India Ltd through Offer for Sale (OFS) mechanism," a Finance Ministry statement here said.

"The retail portion was subscribed 2.9 times," it said.

On the final day of the two-day OFS, retail investors were offered the shares at a discount of 3.5% over cut-off price for the non-retail category. The cut-off price for the retail category was at Rs 95.80 a share, while for non-retail shares it was Rs 94.60.

The government had approved disinvestment of 3% equity shares of NLC as base offer, with option to retain over subscription up to an additional 2% equity shares.

The stake sale in NLCIL got off to a good start earlier, with the portion reserved for institutional investors being massively oversubscribed on the first day on Wednesday.

Trading for the non-retail portion took place at a floor price of Rs 94 per share, a ministry statement said.

"Against the offer size of 3.67 crore, bids were received for 11.63 crore shares, resulting in over subscription by 3.19 times," it said.

Thus the bids for the 11.63 crore shares were worth a little over Rs 1,000 crore.

"Government accordingly decided to retain the over-subscription by revising the total offer size from 3% to 5% of equity shares," the statement added.

After this disinvestment, government shareholding in NLCIL will come down to a little more than 84%.

Economic Affairs Secretary Subhash Garg said that the government had accomplished disinvestment worth Rs 20,000 crore during the current financial year and hopes to exceed the fiscal's divestment target of Rs 72,500 crore.

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