The government on Wednesday deferred the sale of its 12.5% stake in Nalco, questioning the company?s financial position due to dismal second quarter performance. A decision on stake sale is likely to be taken only after the company declares its third quarter results, sources said.
The 12.5% stake sale of Nalco was expected to fetch over R1,500 crore for the exchequer at the stock?s current market price.
Mines Minister Dinshaw Patel said, ?Nalco?s disinvestment will happen next quarter (January-March quarter). It has been deferred for now. There is need to strengthen the company?s financial performance further.? Further discussions on the issue will happen again during January 7-15, he said.
The empowered group of ministers (EgoM) was supposed to finalise the pricing of the stake sale on Wednesday. However, the meeting has been deferred indefinitely. Sources said that there was difference over the share price proposed by the government and the merchant banker.
Nalco happens to be the second issue after Rashtriya Ispat Nigam Ltd (RINL) where differences over pricing have halted the disinvestment process. Sources said that differences on valuation have also delayed plans to launch a market offer for SAIL.
The government hopes to garner R30,000 crore from disinvestment this fiscal, but so far it has not been able to conclude a stake sale plan for any PSU. During the current fiscal, the government is also planning to sell its stakes in Oil India, MMTC, Hindustan Copper and NMDC.
?The Q2 results were not very representative of the company?s valuation. In October, there was little visible improvement. So, we decided that it will be good to do it in the third quarter,? disinvestment secretary Mohammad Haleem Khan said.
The Department of Disinvestment (DoD) will opt for the offer for sale (OFS) or the auction route for selling stake in Nalco.