Sale of 10 per cent NMDC stake to fetch Indian government Rs23,000 crore

The Government of India expects to raise around Rs23,000 crore ($4.9 billion) from the sale of a 10 per cent stake in state-run mining company National Mineral Development Corporation Ltd (NMDC), media reports said today.

The government is expected to finalise its divestment plans by mid-January and the public offer is likely to take place in March 2010, report citing finance ministry sources said.

While retail investors will be allotted shares at the floor price fixed by the government, the ministry will adopt an auction method for the sale of shares to institutions and high net-worth individuals, reports said.

NMDC, which is under the administrative control of the ministry of steel, is involved in the exploration of a wide range of minerals, including iron ore, copper, rock phosphate, lime stone, dolomite, gypsum, bentonite, magnesite, diamond, tin, tungsten, graphite, beach sands etc.

The company is India's single largest iron ore producer and exporter and currently produces about 30 million tonnes of iron ore from three fully mechanised mines - two at Bailadila in Chhattisgarh and at Donimalai in Karnataka.

NMDC also owns the country's only mechanised diamond mine in the country with a capacity of one-lakh carats per annum at Panna in Madhya Pradesh, which restarted operations from 19 June this year.

NMDC, which has also been consistently making profit and paying dividend for the past few years, had reported a profit before tax of Rs6,648 crore in the 2008-09 financial year against a PBT of Rs4,947 crore in the previous year (2007-08).