The Rs 3,600-crore share sale by the government in NMDC has managed to garner full subscription. A total of 219.5 million shares have been put on the block by the government. The offer for sale (OFS) has garnered bids for 220.45 million shares from institutional investors—–1.15 times the shares on offer to them.
About 21.95 million shares reserved from retail investors will be auctioned on Wednesday.
The floor price for the OFS has been set at Rs 165 per share. Most of the bids on Monday came at Rs 166, data provided by stock exchanges showed.
Shares of NMDC on Tuesday closed at Rs 169.65, down 3.22 per cent.
Currently, the government holds 68.29 per cent stake in the company. Following the OFS, the stake will drop to 60.80 per cent.
“NMDC’s valuation of 3.8 times its FY2023E EV/EBITDA (excluding value of the steel plant at 0.5x) is attractive as it is at a steep discount of 28 per cent to average EV/EBITDA multiple of 5.3 times for global mining peers despite earnings visibility and strong return ratios,” Sharekhan had said in a recent note.
The share sale was part of the disinvestment programme for 2021-22. The target for which has been set at Rs 1.75 trillion.
In May, the government had mopped up nearly Rs 4,000 crore by divesting its holding in Axis Bank held by the Specified Undertaking of Unit Trust of India's (SUUTI).
Analysts say NMDC, an iron ore miner, is attractively valued compared to global peers.
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