Sebi gives nod to Tamil Nadu to acquire 5% stake in NLC

NEW DELHI: Market regulator Securities and Exchange Board of India ( Sebi) has given in-principal approval to allow Tamil Nadu state government buy its 5% stake in state-run Neyevli Lignite Corporation.

In a statement issued on Sunday, the finance ministry said the department of disinvestment has requested the Tamil Nadu government to nominate senior official for further discussions with SEBI with regard to its proposal to sell the proposed 5% stake of the central government in Neyveli Lignite Corporation ( NLC) to the state undertakings of Tamil Nadu. The ministry said that Sebi is of the view that the proposal could get covered within the guidelines on IPP.

The ministry said that in the offer document for IPP, the seller can propose the criteria on the basis of which allocation could be made. This can be used to give preference to any set of Qualified Institutional Buyers including stage undertakings of Tamil Nadu.

The central government has decided to sell 5% stake in NLC which would fetch it around Rs 455 crore. The government holds 93.56% stake in the firm. The stake sale will also help the company to meet the minimum public holding norm.

Last month, Tamil Nadu chief minister J Jayalalithaa had written to Manmohan Singh expressing interest to buy 5% in the company. Employee unions of the Tamil-Nadu headquartered firm are protesting against the stake sale and 30,000 workers went on an indefinite strike since July 3.