State-owned mining major National Mineral Development Corporation (NMDC) has asked the government to offload over 47 per cent of its stake in the company. The government holds 98.38 per cent in the navratna PSU with the balance being held by banks, financial institutions and public.
"We have recommended that government maintains its ownership of the company by retaining 51 per cent equity but divest the remaining," a company official said. "This will help the company's exposure in the market, improve its tradeability and mop up revenues for future expansions.
" Recently the company's stock was upgraded to the A category from the B category of stocks listed on the Bombay Stock Exchange. In February, the stock was moved from the lowest category of stocks-Z to the B category after the procedures for dematerialisation of 50 per cent of its publicly-held shares were completed.
It was also influenced by the market capitalisation of the company which had peaked at over Rs 200,000 crore in November 2007. NMDC had also split its shares and announced a bonus issue late last year.
The shift happened despite the company" miniscule free float. "The shift is a result of internal arrangement by the Securities and Exchange Board of India (SEBI), said Kumar Raghavan, company secretary and executive director, NMDC. "For private companies 10 per cent of the shares have to be public even at the time of listing but since NMDC is a public sector undertaking, there is no binding of this sort.
" With a market cap of over Rs 110,000 crore, the mining heavyweight is one of the biggest listed PSUs in the country. It produces 30 million tonnes of iron ore and has reserves of over 200 mt.
The company is investing Rs 19,000 crore over the next five years
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