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ITDC, STC divestment on anvil

Statesman News Service |

The disinvestment department has sought Cabinet nod to offload five per cent stake in ITDC and 1.02 per cent in STC through the offer for sale route
press trust of india
NEW DELHI, 23 JUNE: The finance ministry has moved a Cabinet note for disinvestment in State Trading Corporation (STC) and India Tourism Development Corporation (ITDC) to make the PSUs compliant with minimum public shareholding norms of the Securities and Exchange Board of India.
The disinvestment department has sought Cabinet nod to offload five per cent stake in ITDC and 1.02 per cent in STC through the offer for sale (OFS) route, a finance ministry official said.
The department has moved a draft Cabinet note in this regard to seek comments from ministries, the official added.
The government expects the sale of five per cent stake or 42.88 crore shares in ITDC to fetch Rs 23.58 crore. Besides, it aims to garner about Rs 10 crore through disinvestment of 1.02 per cent or 6.13 crore shares in STC.
The government currently holds 92.11 per cent stake in ITDC and 91.02 per cent stake in STC. The government has to bring down its stake in the companies to 90 per cent by 8 August to meet the minimum public holding norms of the market regulator.
At the end of financial year 2012-13, the paid-up capital of ITDC stood at Rs 86 crore and earned a net profit of Rs 19 crore. For STC, the paid-up capital stands at Rs 60 crore and net profit at Rs 18 crore for fiscal 2012-13.
Following the approval of the Cabinet Committee on Economic Affairs (CCEA), the EGoM on disinvestment would decide on the floor price for stake sale in the two companies. Further, the disinvestment department has also sought CCEA approval for allotting shares to employees of the companies at a five per cent discount to the last cut-off price in the OFS.
The government uses the OFS route to divest its stake in PSUs and to make firms compliant with 10 per cent minimum public holding. It has already used the route to sell stake in MMTC, Oil India, NTPC, NMDC and Hindustan Copper.