Mining giant NMDC 8.38 pc stake sale on Cabinet agenda today

The Cabinet Committee on Economic Affairs (CCEA) will consider a proposal of the steel ministry to sell 8.38 per cent...

The Cabinet Committee on Economic Affairs (CCEA) will consider a proposal of the steel ministry to sell 8.38 per cent government stake in state-owned mining giant National Mineral Development Corporation (NMDC). The mining giant will achieve the 10 per cent public float criterion the government had specified for listed PSUs. The stake sale will help the exchequer raise a whopping Rs 11,000 crore at current valuation of the NMDC stock.

With the finance ministry backing the proposal,it is likely the CCEA would approve the stake sale. As of now only 1.62 per cent shares of the PSU are with the public implying that the government holds 98.38 per cent stake in it. The 10 per cent dilution is also in consonance with the requirement of the Securities and Exchange Board of India (Sebi) that had advised the government to increase public shareholding in the PSUs to the required threshold limit of 10 per cent.

By divesting 8.38 per cent,government will be able to raise about Rs 11,656 crore (at the closing price of Rs 350.85 per share on the bourses as on October 20). At this price,the PSUs market capitalisation stands at Rs 1,36,854 crore. The companys current paid-up capital is Rs 396.47 crore divided into 396.47 lakh shares of Re 1 face value each. Of this,the government holds 390.06 lakh shares of Rs 1 each,the sources said.

Story continues below this ad

NMDC sources said the company did not have any plans to piggy back the government stake sale by a fresh issue of shares. We have enough funds to take care of our expansion needs over the near future, said a top NMDC executive. NMDC plans to invest nearly Rs 1,400 crore over this year and the next. Besides,it has tied up with state-run steel behemoth SAIL for jointly developing Arki limestone mines in Himachal Pradesh.

The navratna company is hopeful of completing the merger of Sponge Iron India Limited (SILL) with itself soon and invest another Rs 1,200 crore to expand SILLs operations. Carrying forward its plans for forward integration,NMDC is setting up a 3 million tonne integrated steel plant at Nagarnar in Chhattisgarh at an estimated expenditure of Rs 14,000 crore. In August last,NMDC re-opened the historic Panna diamond mines,which was closed for four years on account of environmental concerns.

Tags:
cabinet committee on economic affairs

‘Grave insult to wounded people’: Cong lashes out at PM Modi amid his first Manipur visit

India14 hr ago

As Prime Minister Narendra Modi visits Manipur for the first time since ethnic violence hit the state in May 2023, the Congress on Saturday called it a “farce, tokenism, and a grave insult to a wounded people”.

View all shorts

Live Blog