EGoM clears 7.64% stake sale in National Fertilizers; issue to hit markets on July 31

NEW DELHI: A panel of ministers on Tuesday approved the proposal to disinvest government's 7.64 per cent stake in National Fertilisers Ltd (NFL) and the issue will hit the markets tomorrow.

"The EGoM has cleared NFL offer for sale (OFS). The issue will hit the markets tomorrow," Disinvestment Secretary Ravi Mathur told reporters here.

He said the base price for the OFS would be made public after the close of market hours on Tuesday. Sources said the price would be at a discount to the current market price.

The Empowered Group of Ministers (EGoM) on disinvestment is headed by Finance Minister P Chidambaram.

The share sale is expected to fetch around Rs 100 crore to the exchequer at current market price. Shares of NFL were trading at Rs 27.25, down 8.40 per cent over previous close on BSE.

The Cabinet Committee on Economic Affairs (CCEA) had last month cleared the 7.64 per cent, or 3.74 crore share proposal.

Government holds 97.64 per cent stake in the company and the disinvestment is being done to make it compliant with Sebi norms.

As per Sebi norms, a public sector listed company should have 10 per cent public float by August 8, 2013.

The paid-up equity capital of the company, as on March 31, 2012, was Rs 490.58 crore.

The government uses the OFS route, popularly known as auction method, to divest its stake in PSUs that come under top 100 companies in terms of market capitalisation.

The government proposes to raise Rs 40,000 crore by way of disinvestment in the current fiscal. So far in the current fiscal it has raised over Rs 800 crore.