Government plans to sell 7% stake via offer for sale in NLC India

NLC India, formerly known as Neyveli Lignite Corporation Limited, a Navratna company engaged in the business of mining lignite and generating power using lignite, as well as renewable energy sources, announced an Offer for Sale on Wednesday.

Offer For Sale

According to the press release, the government may offload up to a 7% stake in the NLC India through an offer for sale. The promoter or government proposes to sell a 5% stake in the company, equivalent to 69,331,830 equity shares with a face value of Rs 10 each, as a base offer for non-retail investors only on March 7.

On March 11, the offer is extended for both retail and non-retail investors who choose to carry forward their unallocated bids, with an additional sale of up to 27,732,732 equity shares, representing 2% of the paid-up equity capital of the company. Collectively, this forms 97,064,562 shares, representing 7% of the paid-up equity capital of the company.

As of the December quarter of FY24, the government currently holds a 79.20% stake in the company.

The floor price of the offer is set at Rs 212 per share, representing a discount of 6.5% based on Wednesday’s closing price of Rs 226.70 per share on the BSE. If the government offloads the entire 7% stake, it will amount to approximately Rs 2,058 crore based on the floor price.

Share Performance

At the start of the day, it opened at Rs 218 per share on the BSE, reflecting a 3.83% decline compared to the previous day’s closing price of Rs 226.70 per share. It reached intraday highs and lows of Rs 223 and Rs 217.10, respectively. Currently, the stock is trading at around Rs 222.85 per share on the BSE.

Furthermore, the stock is trading at a discount of approximately 24% from its all-time high price of Rs 293.75 per share, recorded in February 2024. Additionally, the company’s stocks have delivered impressive multibagger returns of over 170% in the past one year and over 310% in the past three years. The current market capitalisation of the company stands at Rs 30,901 crore on the BSE.

Investors must keep this stock on their radar.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.