Nalco OFS over-subscribed 2.56 times, govt to raise Rs1,200 crore

The union government has raised Rs1,200 crore from the sale of a 9.2-per cent paid-up equity capital in National Aluminum Company Ltd (Nalco), in the first divestment of the current financial year, 2017-18.

The Department of Investment and Public Asset Management (DIPAM), under the ministry of finance has set a record target of realising Rs72,500 crore through disinvestment this fiscal.

The centre had raised Rs46,276 crore through divestment of stake in public sector undertakings during the 2017-17 financial year, an all-time high achievement.

The government had earlier fixed the divestment in Nalco at 5 per cent of paid-up capital, but an overwhelming response from the market prompted DIPAM to exercise the green shoe option to retain over-subscription and raised the offer to 9.2 per cent on Wednesday.

With this transaction, the government of India's shareholding in Nalco has come down to 65.37 per cent.

The issue was originally over-subscribed by 2.56 times and if the revised offer of 9.2 per cent is taken, the issue is subscribed 1.43 times. The green shoe option (over-subscription option) was used by the government for the first time, since the modified OFS procedure spanning 2 days (T and T+1 day) was put in place by Sebi in 2016.

The retail investor continues to back disinvestments of CPSEs by DIPAM. For the fourth time in a row, retail investors outperformed institutional investors. This is particularly satisfying to DIPAM, as one of the objectives of the disinvestment policy is to make PSU shareholding broad-based so that nation's wealth is shared by its citizens.

Encouraged by the successful completion of NALCO stake sale, DIPAM is gearing up for a series of disinvestments throughout the year to meet its target.