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Money Jun 18, 2013

NFL stake sale: Govt may select banker on 25 June

New Delhi: Four merchant bankers, including SBI Capital and Kotak Investment, are in race to manage the process of 7.64 percent stake sale in National Fertilisers (NFL), which may fetch around Rs 148 crore to the exchequer.

The four bankers-IDBI Capital Market Services, Avendus Capital, SBI Capital and Kotak Investment Banking-would be making presentation to the Department of Disinvestment (DoD) on 25 June.

Selling fertilizer stake. AFP

Selling fertilizer stake. AFP

Earlier this month the DoD had invited expression of interest from merchant bankers with experience in public offerings/OFS to act as book running lead managers and to assist and advise government in the process.

The government plans to disinvest 7.64 percent stake, or over 3.74 crore shares, of NFL through Offer For Sale (OFS) route in the domestic market.

At the current market price of Rs 39.70 apiece, the 7.64 percent stake sale could fetch around Rs 148 crore to the exchequer.

At present, the government holds 97.64 percent stake in NFL.

An inter-ministerial panel, headed by disinvestment secretary, had cleared NFL stake sale last month.

The paid-up equity capital of the company, as on 31 March 2012 was Rs 490.58 crore.

The stake sale in NFL is part of DoD's effort to meet the minimum 10 percent public shareholding norm as stipulated by market regulator Sebi for PSUs.

The government uses the OFS route, popularly known as auction method, to divest its stake in PSUs that come in top 100 companies as per market capitalisation. It has already used the route to sell stake in Oil India, NTPC, NMDC and Hindustan Copper in last fiscal.

The government proposes to raise Rs 40,000 crore by way of disinvestment in the current fiscal. It has already lined up a host of companies, including Coal India, Indian Oil and Hindustan Aeronautics, for stake sale.

In the last fiscal (2012-13), the government had raised Rs 23,920 crore through disinvestment.


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