Govt sets $1.1 billion NMDC stake sale for Wednesday

MUMBAI Tue Dec 11, 2012 1:36am IST

1 of 2. A labourer assembles iron chain link fence at a factory on the outskirts of Jammu March 1, 2012.

Credit: Reuters/Mukesh Gupta/Files

Related Topics

Stocks

   

MUMBAI (Reuters) - India has set a share sale in state miner NMDC Ltd (NMDC.NS) for Wednesday, the company said, in a deal which sources said could add up to $1.1 billion to government efforts to ease its yawning budget deficit.

The sale, part of the government's divestment programme to raise $5.5 billion by next March, will be the biggest by a state-run company since a $2.5 billion selldown in Oil and Natural Gas Corp (ONGC.NS) in March.

The government may on Tuesday announce a floor price for the NMDC issue in a range of 145 rupees to 150 rupees a share, said two sources with direct knowledge who asked not to be named as details are not yet public.

The government, which owns 90 percent of NMDC, will sell a 10 percent stake, NMDC said in a notice to the stock exchanges. At the top end, the sale will garner about $1.1 billion.

NMDC shares closed 2.3 percent lower at 154.75 rupees, ahead of the decision. The stake sale would be carried out via an auction to institutional investors, and will open on Wednesday morning and close later in the day.

New Delhi has so far raised $148 million from the sale of stakes in state companies in a process hit by volatile markets and wrangling among government officials.

The government is likely to step up its divestment programme in the months ahead amid concerns about its ballooning fiscal deficit, which is seen at 5.6 percent of gross domestic product in this fiscal year, above an official target of 5.3 percent.

The scale of the deficit will make it tougher for New Delhi to avoid a credit rating downgrade.

Other state companies in which the government expects to reduce its stake in the coming months include explorer Oil India (OILI.NS), power producer NTPC Ltd (NTPC.NS) and National Aluminium Co (NALU.NS).

Citigroup (C.N), Goldman Sachs (GS.N), Bank of America Merrill Lynch and Indian investment banks ICICI Securities and Enam Securities are the bankers for the NMDC share offering.

(Reporting by Prashant Mehra and Sumeet Chatterjee; Editing by Tony Munroe and David Cowell)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Economic Pulse

REUTERS SHOWCASE

Smartphone Wars

Smartphone Wars

Google's Android One adds to Samsung's worries.  Full Article 

India Services Activity

India Services Activity

Services growth slowed in August, orders waned.  Full Article 

Money Matters

Money Matters

Banks pile pressure on liquor baron Mallya over airline loans.  Full Article 

Moody's on India

Moody's on India

India's rating seen limited by fiscal deficit, inflation - Moody's  Full Article 

Political Pulse

Political Pulse

100 days of Modi: Good for business, not so good for marginalised groups.  Full Article 

Segway in India

Segway in India

Segway’s India business pegs hope on tech-savvy Modi.  Full Article 

China Economy

China Economy

China services activity rebounds but property remains a worry.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage