NMDC hopes to raise Rs11,000-crore through follow-on offer

The government will offload an 8.3 per cent stake in PSU mining giant National Mineral Development Corporation (NMDC), in a follow-on share sale, to raise around Rs11,000 crore ($2.4 billion), sources close to the developments said.

The company is coming out with an issue of 332,243,200 equity shares of Re1 each for cash at a price band of Rs300-350 apiece.

UBS Securities India Private Limited, Citigroup Global Markets India Private Limited, Edelweiss Capital Limited, Kotak Mahindra Capital Company Limited, Morgan Stanley India Company Private Limited and RBS Equities (India) Limited are the book running lead managers to the FPO.

Kotak Securities Limited and Edelweiss Securities Limited are the Syndicate Members to the IPO.

NMDC, the country's top iron ore producer, expects to raise another Rs5,000 crore in debt for its proposes Rs17,000-crore steel project in Karnataka.

The Karnataka project is at a nascent stage. NMDC has just appointed a consultant to prepare a project report.

NMDC is also working on setting up another steel project of 3 million tonnes capacity at Chhattisgarh.

NMDC plans to pump its internal accruals of around Rs12,000 crore and earnings of about Rs4,000 crore profit into the company's Rs26,000 crore capital expenditure that includes the integrated steel plant in Chhattisgarh, two pelletisation plants, a beneficiation plant and developing new mines.