22 August 2016 Current Affairs:
Department of Investment and Public Asset Management (DIPAM), the nodal agency under the finance ministry that co-ordinates government disinvestment programme has selected four investment banks for the proposed share sale in HUDCO (Housing & Urban Development Corporation Limited).
These four banks include Nomura, SBI Caps, ICICI Securities and IDBI Capital.
After qualifying on technical basis, DIPAM has selected Japanese investment bank Nomura that has quoted the lowest financial bids of a little over Rs 5 core and others were asked to match the fee, said one of the top official of a leading investment bank that has participated in the process.
The fee quoted by investment banks were for the entire cost of the public issue, that is going to be little over Rs 10 crore .
The government is planning to sell 10% stake in HUDCO, which is under administrative control of the Urban Development Ministry, through an initial public offer (IPO). The proposed move aimed at raising about Rs 1,500 crore on a total valuation of Rs 15,000 crore .
The government is starting with a mandatory 10% sale that will increased to 25% in the next three through offer for sale route .
HUDCO has a paid up capital of Rs 2,000 crore, comprising of 200 crore equity shares of Rs 10 each. Under the proposed share sale programme, the government will sell about 20 crore share. The bankers are told to file the prospectus in the next two to three months so that the issue cap be completed in the current fiscal itself .
The government has set a disinvestment target of Rs 56,500 crore for the current fiscal. Of this, Rs 36,000 crore will be raised from minority stake sale in state run companies and Rs 20,500 crore from strategic sale. So far, the government has managed to raise only Rs 3,183 crore from stake sale in NHPC, employee subscription in IOC and NTPC disinvestment.