Government defers sale of 30% stake in Nalco
Unattractive market price prompts decision
The government has decided to defer disinvestment in National Aluminium Company Ltd. (Nalco) till the second quarter of the next fiscal because of the poor performance of its stock price. Nalco share price is ruling below Rs 60 and the government does not want to divest at these levels. According to official sources, the ministry of disinvestment is of the view that it should get at least four times the price at which the government sold shares in Bharat Aluminium Company (Balco) last year. The government sold 51% stake in Balco to Sterlite Industries at Rs 49 per share. The reasons for a better price for Nalco are that the company is much larger than Balco and boasts of better technology. Also Nalco`s mines have reserves for production for the next 70 years and are comparable to the best in the world. However, in the case of Balco, the disinvestment was a strategic sale wherein the government handed over management control of the company. In Nalco, the government`s 30% offer will be a minority stake.
