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Tuesday, March 02, 2010

NMDC follow-on offer to open March 10

The follow-on public offering (FPO) of state-run mining firm NMDC (National Mineral Development Corporation) will open for subscription on March 10 and close March 12.

A 5% discount to the offer price determined pursuant to the completion of the book-building process shall be offered to retail individual bidders and eligible employees.

The largest iron ore producer by volume in India (according to the Federation of Indian Mineral Industries), is entering the capital market with a follow-on public offer of 332,243,200 equity shares of face value Re 1 each through an offer for sale by the President of India, acting through the Ministry of Steel (MoS), Government of India for cash at prices determined through the alternate book building method.

The offer comprises a net offer to the public of 330,500,000 equity shares and a reservation of 1,743,200 equity shares for purchase by eligible employees at a discount of 5% to the floor price. The offer shall constitute 8.38% of the post offer paid-up equity share capital of the company. The government will hold 90% stake in the company post issue.

The company shall not receive any proceeds of this offer and all the proceeds shall be received by the selling shareholder - the Government of India, which will dilute 8.38% stake in the company.

For the nine-month period ended December 2009, it has reported a profit after tax of Rs 2,381.51 crore on a total income of Rs 4,882.54 crore.

The book running lead managers to the issue are UBS Securities India Private Limited, Citigroup Global Markets India Private Limited, Edelweiss Capital Limited, Kotak Mahindra Capital Company Limited, Morgan Stanley India Company Private Limited and RBS Equities (India) Limited (formerly known as ABN Amro Asia Equities (India) Limited).

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