Steel ministry clears NMDC stake sale; 8.38 per cent divestment to fetch Rs12,000 crore
04 Aug 2009
The ministry of steel has approved a proposal for divesting an additional 8.38 per cent in state-run National Mineral Development Corporation (NMDC), making for a total 10 per cent equity divestment in the state-run mining company.
The divestment of an 8.38 per cent stake in NMDC is expected to fetch the government around 12,000 crore. NMDC, the country's largest iron ore mining company, has a current market cap of Rs1,46,297 crore.
The government had already offloaded 1.62 per cent stake in the blue chip PSU.
SEBI rule requires that a minimum 10 per cent of a company has to be divested for listing it on Indian bourses. However, under current regulations, the state-run entity is exempted from this rule.
The divestment of NMDC stake, once approved by the cabinet, will be taken up by the department of divestment.
"We have approved the 8.38 per cent divestment of government's stake in NMDC. We will be sending the proposal to the disinvestment department in a day or two (for initiating the process of equity sale)," P K Rastogi, secretary in the steel department, said.
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