The Government will kickstart overseas roadshows from tomorrow to gauge investor appetite for the Rs 4,000-crore NMDC stake sale.
The Government plans to sell 10 per cent stake in NMDC through an offer for sale (OFS), which at current prices should net it Rs 4,000 crore. It had sold a similar stake in December 2012 to get Rs 5,900 crore.
Sources said officials of the ministries of finance and steel as well as from the navratna PSU have been divided into two teams to fan out to the four important business centres in the world.
One team will travel to New York and London, while the other would visit Singapore and Hong Kong.
The non-deal roadshows are spread over 10 days and will give an opportunity to inform institutional investors about the company’s growth prospect, sources told PTI.
The Government is being advised by Citibank India, ICICI Securities and SBI Capital Markets on the NMDC disinvestment and the roadshows are to get direct feedback from prospective investors.
The PSU, which is under the administrative control of the Ministry of Steel, is primarily engaged in the business of iron ore mining but is also expanding its activities towards production of steel and other value-added products.
Government is going ahead with the disinvestment despite commodities being off their peak and are not projected to rise in the next one year.
The roadshows are happening after several months of deterring on fears of poor investor response given that commodity prices were volatile and low, sources said.
The Government holds 80 per cent stake in the PSU.
On Friday, shares of NMDC closed at Rs 107.60, up 0.94 per cent on the BSE. At current market prices, sale of 39.64 crore shares or 10 per cent stake would fetch over Rs 4,000 crore to the exchequer.
In the OFS, the government would also allot shares up to a maximum of 5 per cent of the OFS size to NMDC employees at a discount of 5 per cent to the issue or discovered price. The employees will be eligible to apply for shares up to Rs 2 lakh only.
Proceeds from the NMDC disinvestment will be part of the government’s total disinvestment target of Rs 56,500 crore this fiscal.
Of this, Rs 36,000 crore is estimated to come from minority stake sale in PSUs, and the remaining Rs 20,500 crore from strategic sale in both profit and loss-making companies.