The Cabinet Committee on Economic Affairs on Thursday approved disinvestment of 10 per cent stake in public sector unit NMDC Ltd.
The Government owns 90 per cent stake in the Navratna PSU, which is also the country’s largest iron ore miner.
Ten per cent of NMDC’s paid up capital (39,64,71,600 shares, each of full value of Re 1) from the Government’s holding will be divested through the ‘Offer for the Sales of Shares through Stock Exchange’ (OFS) method, as per SEBI Rules and Regulations.
The NMDC scrip closed one per cent lower at Rs 184.40 on the BSE on Thursday. As of March 31, 2012, the paid up equity capital of NMDC stood Rs 396.47 crore. After the disinvestment, the Government shareholding in the company would come down to 80 per cent.
In March 2010, the Government had divested 8.38 per cent in NMDC through a further public offer.
The CCEA also approved the authorisation in favour of empowered group of ministers (EGoM) to change the method of disinvestment from the OFS method, if the same is required subsequently due to market conditions or due to change in SEBI Rules and Regulations, etc.
The EGoM will also decide the floor price, the number of tranches, the basis of allotment and the number of shares to be allotted in each of the tranches.
The EGoM may also accept or cancel the offer, if there is not enough demand at or above the floor price; in case of over-subscription in one or more tranches.
It is also authorised to decide whether the over-subscribed amount is to be retained subject to the overall disinvestment of 10 per cent.