Govt invites bids from i-banks for MOIL stake sale

NEW DELHI: The Centre on Thursday formally kicked off the process of divesting its stake in Manganese Ore India ( MOIL) with the department of disinvestment (DoD) inviting bids for appointing merchant banks to manage the state-run company’s initial public offer.

The DoD has invited bids for appointing three merchant banks to manage the IPO of MOIL. The government is proposing to sell 20% of its stake in the company.

“We plan to move a note for Cabinet approval next month and if market conditions are favourable, the offer is likely to be launched by December,” a DoD official said.

MOIL would be the seventh public sector firm to be a part of the government’s sell-off programme for this fiscal year. The Centre is likely to earn about Rs 5,000 crore from the 20% stake sale. Currently, the government holds 81.57% in the mini-ratna entity, while Maharashtra and Madhya Pradesh own 9.62% and 8.81% stakes in the company, respectively. Under the proposal, the Centre will divest 10% of its stake in the company while the Maharashtra and Madhya Pradesh governments would each off-load 5% of equity.

Banks interested in managing the offer are expected to submit bids by July 26. The short-listed bidders will be required to make presentations to the department on July 28 and 29. MOIL is in the process of amending its memorandum that at present does not allow for a share sale through a public offer. This is expected to be approved by the company board in its meeting on July 23. Public offers in Engineer’s India, SAIL, Coal India, Hindustan Copper and Power Grid are already lined up as the government attempts to mop up Rs 40,000 crore from disinvestment proceeds in 2010-11.