NLC India’s OFS Over-Subscribed 5 Times as Institutional Buyers Bid ₹4,158 Crore.
The recent government offer for sale (OFS) of a 3% stake in NLC India has garnered considerable interest, with initial bids from non-retail investors surpassing the base offer size substantially. On the first day of the sale, non-retail investors submitted bids totaling Rs 4,158 crore for 13.03 crore shares at an indicative price of Rs 319.06 per share, significantly higher than the base offer of 2.49 crore shares. This noteworthy over-subscription highlights the robust demand for NLC India shares and suggests confidence in the company’s performance amidst broader market conditions.
The government is strategically selling approximately 4.16 crore shares at a floor price of Rs 303 per share through a two-day OFS, which presents a 9.73% discount compared to the closing price of Rs 335.65 on the BSE prior to the sale. The overall issue includes an additional greenshoe option of 1% that can be exercised in the event of further demand, potentially enhancing the total raised amount should the sale witness full subscription. Should the sale be fully subscribed, it is projected to bring in around Rs 1,200 crore to the exchequer, providing a useful infusion of capital as the government continues its strategy of divesting minority stakes in public sector undertakings (PSUs).
As of the latest data, the government holds a 72.20% stake in NLC India, illustrating significant control over the company. The ongoing divestment efforts have proven fruitful, with the government raising Rs 12,166 crore in the current fiscal year from various PSU stake sales, illustrating a robust approach to capital fundraising. This includes noteworthy contributions from key entities such as Coal India, NHPC, and Central Bank of India. The combined momentum of these sales may further influence investor sentiment and the overall market stability for PSUs, particularly in light of the current fiscal challenges and economic outlook.
Source: The Economic Times
(Expert Note: This report was prepared by the Wealthova team.)