Government to divest 10 per cent in Nalco, Neyveli Lignite

Mumbai: The government is divesting stake in National Aluminium Company (Nalco) and Neyveli Lignite Corporation (NLC) despite warnings by its Left allies. The cabinet committee on economic affairs (CCEA) on Thursday cleared the proposal for sale of 10-per cent equity in both Nalco and NLC.

The disinvestment, planned through the public offer route, would dilute government holding in Nalco to 77.15 per cent from the current 87.15 per cent. In NLC, the government would hold 83.56 per cent post sale against the current 93.56 per cent.

"The cabinet committee on economic affairs (CCEA) cleared two proposals to sell small portion of government equity in non-navratnas. It has been decided to sell 10 per cent stake in NALCO and Neyveli Lignite Corporation (NLC)," said finance minister P Chidambaram.

"We are not touching the navratna companies and the disinvestment in a few non-navratnas is a continuation of the earlier decision," he said, adding it was in line with the consensus reached with the Left allies in November last year.

The issue would take the book building process and the price would be decided in consultation with the lead managers, Chidambaram said.

Based on the current price, sale of 10 per cent in Nalco would fetch the government about Rs1,400 crore while 10 per cent equity sale in NLC would bring another Rs1,100 crore.