Finance ministry kickstarts RCF stake sale process

NEW DELHI: The finance ministry has kick-started the process of 12.5% stake sale in Rashtriya Chemicals and Fertilisers, which may fetch the government about Rs 350 crore. The disinvestment department under the ministry has issued request for proposals for appointment of a merchant banker to handle the stake sale through the offer for sale route, a senior official told ET, adding that merchant bankers will have to put in their bids by January 15.

The government has so far raised just over Rs 6,900 crore through stake sale in state-run firms this fiscal, less than a fourth of its target of Rs 30,000 crore.

The Cabinet had last week approved the stake sale in RCF, in which the government holds 92.5% stake. The company's scrip closed 1.28% up at Rs 55.25 on BSE on Tuesday. The paid-up capital of the company stood at Rs 551.69 crore.

After the successful stake sale in NMDC, the government is hoping to get a good response from both domestic and foreign investors. The government managed to raise about Rs 5,900 crore from the NMDC stake sale, in which the participation of the state-run financial institutions was limited.

A finance ministry official said that LIC picked up only 18.6 million of the 396.5 million shares on offer in the NMDC stake sale, which received bids for 686.9 million shares, or 1.7 times of the initial offer. "So, we are hopeful that with RCF and other issues as well there will be a strong participation from both foreign and domestic investors," the official said.

Earlier, the government faced severe criticism when public sector financial institutions such as LIC had to bail it out over the Hindustan Copper stake sale. The government has identified 10 companies, including NTPC, Oil India, MMTC, SAIL and BHEL, for disinvestment. The stake sale in Oil India is likely later this month, followed by disinvestment in NTPC.