Government to divest 30% in Nalco thro’ overseas cum domestic public offering
To divest further 26% to strategic ally in second stage
Nalco`s disinvestment has been kicked off with the government going in for appointment of global advisors for an overseas cum domestic public offering of Rs 10 bn for 30% of its equity. In the second stage of disinvestment, the government will transfer its 26% to a strategic partner. The government has decided to divest 30% of its stake through an appropriate mix of GDR/ADR issue in the international capital markets and the domestic capital markets. The issue would also indicate that the company would be further divested through strategic divestment route bringing government stake to 26% at an appropriate time after the completion of the proposed international and local issue. However, investment bankers say that the government would probably have got a much higher valuation for its stake in Nalco if it had gone for the strategic partner route initially itself. On a comparison with Balco, which was sold at 19 times its PE, sources say that Nalco being the industry leader could have got a price 25 times price earnings.
