Govt to sell 15% equity in NBCC to raise around Rs1,700 cr

The government will sell 15 per cent equity in state-run builder National Buildings Construction Corporation Ltd (NBCC) to raise around Rs1,700 crore, telecom minister Ravi Shankar Prasad said.

Prasad was speaking to the media after the union cabinet cabinet at its meeting on Wednesday approved the sale of 15 per cent stake in NBCC.

The government holds a 90-per cent stake in the company, which has a market capitalisation of Rs14,274 crore.

"The government hopes an estimated receipt of Rs1,706 crore from this. But it is just estimation," Prasad said.

The actual realisation amount will depend on market conditions and investor interest at the time of disinvestment.

As per market regulator Sebi's guidelines, the minimum public holding in a listed company has to be maintained at 25 per cent.

National Buildings Construction Corporation Limited (NBCC) was listed on the bourses in 2012 when the government diluted 10 per cent stake to raise Rs124.97 crore.

The company has split its share of Rs 10 each into five with a face value of Rs2 each.

The NBCC stock closed at Rs229.80 a piece on BSE, down Rs27.60 or 10.72 per cent over yesterday.

NBCC has also decided to allot additional shares to the eligible and willing employees at a discount of 5 per cent to the issue/discovered (lowest cut off) price of the Offer For Sale (OFS).

The disinvestment of NBCC, the release said, would further broadbase NBCC's shareholding and enhance the disinvestment receipts for making them available to the Government for utilization as per Disinvestment Policy.

The government has proposed to raise around Rs56,500 crore through sale of stake in state-owned companies in the 2016-17 financial year.

Government has set a lower target for PSU stake sale this fiscal as it could not meet last fiscal year's target.