India's finance ministry has asked the steel ministry to give its views on the
"Department of disinvestment has recommended 15 per cent disinvestment in NMDC and sought steel ministry's response on it by November 5. If the steel ministry does not respond by then, it will be construed that they approve of disinvestment department's recommendation," a senior steel ministry official said.
The steel ministry is studying the proposal sent by the disinvestment department at present and will forward its suggestions, if any, before the stipulated time, he added.
Another official in the ministry ruled out a follow-on public offer (FPO) by the company along with the proposed disinvestment. But, he was non-committal when asked if the planned stake sale could happen in phases.
"NMDC does not need money at present, so a FPO is ruled out," he added.
Going by NMDC's present share price, the government could raise around Rs 18,000 crore through disinvestment, which may well be the largest stake sale in this financial year, in terms of revenue to the exchequer, and would aid in financing partly its social sector programmes.
In August, the steel ministry had sent its proposal to sell 8.38 per cent of government equity in the country's largest iron ore miner, which has a market cap of about Rs 118,000 crore on the basis of Friday's closing.
With the disinvestment department recommending 15 per cent stake sale in NMDC, the government's equity in the company is set to fall from present 98.38 per cent to 83.38 per cent. Institutional investors hold 1.62 per cent stake in the firm at present.
"If everything goes on track, the matter regarding disinvestment in SAIL and NMDC — the top two PSUs under the steel ministry — the cabinet committee on economic affairs could be moved by the end of next month," the official added. The disinvestment department has already given its in-principle approval to a 20 per cent disinvestment plan in SAIL in two phases.
The steel ministry has also sent a proposal to the finance ministry for divesting 10 per cent stake in its other PSU, Manganese Ore (India).
Source: PTI
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