The Government of India is set to divest up to 3% of its stake in NLC India Limited, formerly known as Neyveli Lignite Corporation, through an offer for sale (OFS) scheduled for June 9. This move is aimed at mobilizing at least Rs 1,260 crore for the exchequer.
Details of the Offer for Sale
The government will offer nearly 2.8 crore shares, representing 2% of the company's equity, at a floor price of Rs 303 per share. This price is approximately a 10% discount to the stock's closing price of Rs 333.75 on the National Stock Exchange (NSE) on Monday. In addition to the base offer, the government has the option to sell an additional 1.4 crore shares (1% stake) through the green shoe option, bringing the total divestment to up to 3% or nearly 4.2 crore shares.
Impact on Shareholders
The OFS is likely to attract significant interest from institutional and retail investors due to the attractive discount. The floor price of Rs 303 per share offers a compelling entry point for those looking to invest in the state-run mining and power generation company. The sale is part of the government's broader disinvestment strategy to raise funds and reduce its stake in public sector undertakings.
NLC India is a leading player in the lignite mining and power generation sector, with a strong operational track record. The company's performance has been steady, and the government's decision to divest a minority stake is expected to enhance liquidity and market participation.
Investors should note that the OFS will be conducted on the stock exchanges, and the final allocation will be determined based on the bidding process. The government reserves the right to revise the floor price or cancel the offer if market conditions are unfavorable.
