The government’s move to divest 10 per cent stake in NMDC Ltd has seen over a dozen investment banks vying to get the mandate for managing the proposed issue.
According to Department of Disinvestment officials, 16 investment banks have put in bids for handling the Offer for Sale by promoters through the stock exchanges. These include Morgan Stanley, Goldman Sachs (India) Securities Pvt Ltd, Enam Securities Pvt Ltd, IDFC Capital, UBS Securities India Pvt Ltd, Deutsche Bank AG, SBI Capital Markets Ltd.
“The DoD will select upto six banks for the NMDC issue,” a banker familiar with the development told Express.
The investment banks will be making presentations to an inter-ministerial group over the next two days. An announcement on the selected investment banks is expected on Friday.
Traditionally, bids for managing an equity issue of NMDC have always generated a lot of interest among investment banks. In March 2010, the government had sold 8.38% stake in the iron ore miner through a follow on public offer (FPO). There were six merchant banks, including UBS Securities, Citigroup Global Markets, Morgan Stanley and Edelweis Capital who were appointed book running lead managers for the issue.
The government currently holds 90% stake in NMDC. Following the Offer for Sale process, its stake in NMDC will go come down to 80%.
The government is also considering allotting shares to NMDC staff at a discount of 5% to the issue price.
A navratna public sector enterprise, NMDC is currently involved in the mining of wide range of minerals.
Currently, NMDC has a capacity to produce about 27 million tonnes per annum of iron ore. By 2014-15, it is planning to ramp up the output to 40 mt per annum.
As part of its expansion plans, NMDC has been scouting to buy overseas mining assets through special purpose vehicle route or in joint ventures.