Shares of NMDC slipped by 6% to end at Rs375 after the government announced that it fixed a price band of Rs300-350 for the follow-on public offer of NMDC, and will raise between Rs99-11.5bn depending on the cut-off price.
The issue will open on Wednesday. The upper end of the price band translates into a 12.6% discount to Monday’s closing price of Rs400.60, while at the lower end, the discount works out to 25%.
The government has abandoned the French auction route for the NMDC offering and will use the conventional book-building process in the hope of getting a better subscription.
The government will be divesting 8.38% of its stake ~332.2mn equity shares in NMDC, with ~17.43 lakh shares reserved for eligible employees.