The follow-on public offer (FPO) of NMDC received bids for 5.71 crore shares compared with 33.22 crore shares on offer on the first day of the issue today 10 March 2010, data on NSE showed. The FPO was subscribed 17%. The government has fixed a price band of Rs 300-350 for the FPO of mining giant NMDC and will raise between Rs 9900-11550 crore depending on the cut-off price. The issue will close on Friday, 12 March 2010.
The government is divesting 8.38% of its stake or 33.22 crore equity shares in NMDC through the FPO, with 17.43 lakh shares reserved for eligible employees.
The government has abandoned the French auction route for the NMDC offering and used the conventional book-building process in the hope of getting a better subscription. Under this method, bids are invited from investors within the specified price band.
NMDC is the largest mining company in the country with iron ore production of about 30 million tonnes. At present, the government owns 98% in the firm.
The company's net profit fell 39.6% to Rs 859.99 crore on 32.1% fall in sales to Rs 1587.58 crore in Q3 December 2009 over Q3 December 2008.