The government on Monday fixed the price band for the upcoming 10% stake sale in India’s largest iron ore miner National Mineral Development Corp (NMDC) at Rs. 145-150 that will fetch the exchequer between Rs. 5,750 crore and Rs. 5,950 crore. The disinvestment, which is being done through the auction route would commence on Wednesday.
The price band is around 3-6.3% lower than the current valuation of the company. Shares of the company fell by 2.5% on Monday to settle at Rs. 154.75.
The stock had underperformed the market over the past one month till last Friday, falling 13% compared with the Sensex’s 2.76% rise. The scrip had also underperformed the market in past one quarter, sliding 15.2% as against Sensex’s 9.8% rise.
This is the second disinvestment by the government in this fiscal after last month’s 5.6% stake sale for about Rs. 807 crore in Hindustan Copper.
The government has a 90% stake in NMDC. In February 2008, the Centre had raised over Rs. 9,000 crore through divesting an 8.4% stake at Rs. 300 per share.