The part-equity sale in Neyveli Lignite Corporation (NLC), which generated considerable heat following protests by trade unions, sailed through on Friday, with five public sector companies of Tamil Nadu purchasing the stake.
The institutional placement programme (IPP) involving the sale of a little over 5.97 crore shares of the Centre in the Navaratna public sector undertaking was oversubscribed within an hour of the opening of trade.
Sources associated with the deal said there were no bidders other than the five PSUs from Tamil Nadu – TIDCO, SIPCOT, TIIC, Powerfin and TUFIDCO. Though only 3.56 per cent equity was for sale, the PSUs had bid in excess as a precautionary measure against any error. The price band of the one-day offer was Rs.58-60 per share. According to sources, the five entities quoted Rs.60 each share.
According to Bombay Stock Exchange, the cumulative quantity for which bids were received was 6.12 crore. This was on account of the five PSUs, which were also qualified institutional buyers, bidding for more than the stipulated stake.
The divestment was necessitated for complying with the 10 per cent minimum public shareholding norm in PSUs. Besides NLC, the Centre went for part-stake sale in STC and ITDC. Together, the sale garnered Rs.395 crore for the exchequer with the NLC deal, by its sheer size, fetching as much as Rs.360 crore.
No issues are expected from here to the transfer of the shares in NLC to the State PSUs, sources said, pointing that the minimum public shareholding norm was to be achieved by August 8.
Besides coming to the aid of Centre in meeting the deadline, the State government helped it avert issues, primarily protests by trade unions against the sale, as they viewed it as a precursor to privatisation. Chief Minister Jayalalithaa, opposed to the sale initially asked the Centre to seek exemption for NLC from the minimum public shareholding norm. When the Centre said that was not possible, she suggested that it sell the stake to the State.