Govt may garner Rs6,500-cr as NMDC, MOIL plan to buy back 25% shares
08 June 2016
Cash-rich mineral explorer NMDC and MOIL will buy back 25 per cent of its paid-up shares for about Rs10,000 crore instead of the government selling off its equity in the open market as an alternative to the PSU divestment scheme.
''NMDC and MOIL will buy back 25 per cent of the paid-up capital. A notification in this regard is expected shortly,'' a finance ministry official said.
The government, which holds an 80-per cent stake each in NMDC and MOIL, is expected to garner around Rs6,500-crore, or two-third of the buy-back amount, based on the proportion of shares that the government and the public may tender.
Meanwhile, another state-owned undertaking, Nalco had, last month, said it would buy back 25 per cent of government equity for over Rs2,835 crore.
Nalco will by buying back 644.3 million shares at Rs44 apiece. The government holds 80.93 per cent in Nalco.
As of end-March 2015, NMDC had a cash balance of Rs18,443 crore, Nalco (Rs4,628 crore) and MOIL (Rs2,830 crore).
Shares of NMDC closed at Rs91.65, up 1.66 per cent on the Bombay Stock exchange (BSE) on Tuesday while the MOIL scrip ended at Rs243.10, up 1.42 per cent on the BSE.
Facing a disinvestment target of Rs56,500 crore for current fiscal, Department of Investment and Public Asset Management (DIPAM), previously known as Department of Disinvestment, has been asking cash rich PSUs to buy back shares.