Government has given its go ahead for 7.64 per cent disinvestment in the National Fertilisers Ltd, which is expected to fetch around Rs 130 crore (Rs 1.3 billion) to the exchequer.
The Cabinet Committee on Economic Affairs cleared the 7.64 per cent or 3.74 crore (37.4 million) share proposal at its meeting on Thursday.
Government holds 97.64 per cent stake in the company and the disinvestment is being done to make it complaint with Sebi norms, Finance Minister P Chidambaram said on Friday while briefing on the CCEA decisions.
As per Sebi norms, a public sector listed company should have 10 per cent public float by August 08, 2013.
At the current market price of Rs 34.65 a piece, the stake sale could fetch over Rs 130 crore to the exchequer.
The company's shares were trading at Rs 34.65 a piece on BSE, up 2.21
The Department of Disinvestment had approached the CCEA for stake sale in the company.
An inter-ministerial panel, headed by Disinvestment Secretary, had cleared NFL stake sale last month.
The paid-up equity capital of the company, as on March 31, 2012, was Rs 490.58 crore (Rs 4.9 billion).
The stake sale in NFL is part of DoD's effort to meet the minimum 10 per cent public shareholding norm as stipulated by market regulator Securities and Exchange Board of India for public sector units.
The government uses the OFS route, popularly known as auction method, to divest its stake in PSUs that come under top 100 companies in terms of market capitalisation. It has already used the route to sell stake in Oil India, NTPC, NMDC and Hindustan Copper during last fiscal.
The government proposes to raise Rs 40,000 crore (Rs 400 billion) by way of disinvestment in the current fiscal.
