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Govt mops up $186 mn from Nalco stake sale

20 April, 2017

The government raised Rs 1,200 crore ($186 million) by selling a 9.2% stake in state-run National Aluminium Co (Nalco), in the first asset sale in the new financial year.

The share sale was oversubscribed 1.43 times, the government said in a statement. Both institutions and retail investors took part in the sale, it added.

The government now owns a 65.37% stake in the aluminium maker.

The government had planned to sell at least a 5% stake in Nalco and had an option to offload up to 10%. The share sale opened for non-retail investors on Wednesday and for retail investors on Thursday.

Shares of Nalco gained 0.5% on Thursday to close at Rs 68.10, a tad higher than the Rs 67 floor price set for the sale.

The Nalco sale is part of the finance ministry’s efforts to raise Rs 72,500 crore in the fiscal year that began on 1 April through divestment of government stakes in state-run and private-sector companies to help lower its budget deficit.

Of the total amount, the Centre aims to mop up Rs 46,500 crore from minority stake sales, Rs 15,000 crore from strategic sales and Rs 11,000 crore by listing state-owned insurance companies.

In 2016/17, the government raised Rs 46,247 crore from asset sales. This exceeded the revised target of Rs 45,500 crore; the original goal was Rs 56,500 crore. The government sold minority stakes in several companies last year, including cigarette maker ITC Ltd, manganese ore mining company MOIL Ltd, NHPC Ltd, NBCC Ltd and Hindustan Copper Ltd.

This fiscal year, the government intends to initiate share sale in unlisted companies such as general insurance companies, Hindustan Aeronautics Ltd and Airport Authority of India Ltd.

The government is also aiming to launch HUDCO Ltd’s initial public offering after it filed its draft prospectus for regulatory clearance. Hudco’s share sale will be the first IPO of a state-run company since March 2012. In late March, Cochin Shipyard Ltd file for an IPO.

Earlier this week, the finance ministry sought bids from merchant bankers and legal advisers to manage the sale of shares in seven firms including Indian Oil Corp Ltd, NTPC Ltd and Steel Authority of India Ltd to raise an estimated Rs 34,500 crore.

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Govt mops up $186 mn from Nalco stake sale

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