Nalco share sale fully subscribed

OFS gets demand worth ~954 crore from non-retail bidders

National Aluminium Company (Nalco)'s offer for sale (OFS), first government divestment of 2017-18, was fully subscribed on Wednesday, with the 96.6-million share offering getting 142.4 million bids.

Government, which currently owns 74.58 per cent stake in Nalco, is selling up to 10 per cent stake worth ~1,300 crore in the aluminium manufacturer. The OFS comprises of 96.6 million shares (five per cent stake) as the core issue and an option to retain oversubscription for another 96.6 million shares.

So far the government has managed to mop up ~954 crore from non-retail investors. Meanwhile, the OFS will remain open for retail investors on Thursday. Up to 154 million shares will be auctioned for retail investors (those investing up to ~2 lakh).

Sources said most of the bids so far have come from state-owned institutions, including Life Insurance Corporation.

The government has set a floor price of ~67 per share for the OFS, nearly nine per cent discount to Wednesday's closing price of ~73.45. Retail investors are being offered an additional discount of five per cent.

Shares of Nalco on Wednesday dropped ~5.7, or 7.8 per cent, to close at ~67.75 on BSE.

If the government gets bids worth another ~340 crore, it will be able to exercise the entire greenshoe option, said a banker. If not, the government will retain all of Wednesday's bids and whatever retail bids that are received on Thursday, he added.

The government has more disinvestments planned in the near term, said the banker quoted above.

The Centre has set up an ambitious divestment target of ~72,500 crore for the financial year. Of this, the government expects to garner ~46,500 crore through minority stake sales, another ~15,000 crore from strategic divestment. The initial public offerings of general insurance companies are expected to fetch another ~11,000 crore. Divestment proceeds had touched a life-time high during the previous financial year.