Govt to divest 5% stake in Container Corp

Mumbai: The government has decided to sell almost 5% of its stake in logistics firm Container Corp. of India Ltd (Concor) through an offer for sale (OFS) over Thursday and Friday, the firm said in a filing to stock exchanges on Tuesday.

The government, which owns 61.79% stake in the company as on 31 December, will sell as many as 9.74 million shares through OFS, the filing said. Floor price for the share sale has been set at Rs.1,195 per share.

At the floor price, the share sale will fetch the government Rs.1,165 crore. The OFS will be open for institutional and high net-worth individuals on 9 March, while retail investors will be able to bid for the shares on 10 March.

The share sale will be conducted over two days, according to the tweaked Securities and Exchange Board of India (Sebi) rules, whereby only institutional and other non-retail investors are permitted to place bids on the day of offer (T+0). Retail investors alone can bid one day after the trade date (T+1).

Concor’s share sale is the first disinvestment deal to be launched by the government after the Union budget on 29 February, in which the government reduced the disinvestment target for fiscal 2017.

It aims to raise Rs.56,500 crore by selling stakes in state-owned units in 2016-17, of which Rs.36,000 crore will come from minority stake sales and Rs.20,500 crore from strategic stake sales.

This is 19% lower than the Rs.69,500 crore the government had targeted in the last budget. The target, though, was later scaled down.

Concor, which was incorporated in 1988, manages a network of 62 inland container depots and container freight station, according to data on its website. The firm provides services such as inland transport by rail for containers, management of port terminals and air cargo complexes.

Shares of Concor fell 0.54% to Rs.1,226.65 on BSE, while the benchmark Sensex gained 0.05% to 24,659.23 points.

Last month the government raised almost Rs.5,000 crore by selling 5% in power producer NTPC Ltd. The total book was subscribed 1.53 times, data showed. The Concor share sale will be the seventh disinvestment offer from the government in this fiscal.

Apart from NTPC, the government has sold a part of its stake in firms such as Rural Electrification Corp. Ltd, Power Finance Corp. Ltd, India Oil Corp. Ltd, Dredging Corp. of India Ltd and Engineers India Ltd.

So far this fiscal, the government has managed to mobilize approximately Rs.18,277 crore through disinvestment offers, far short of its revised target of Rs.41,000 crore for the current fiscal.

The government is also expected to fetch almost Rs.13,784.85 crore (excluding tax on distributing dividend) from Coal India Ltd, which declared an interim dividend of Rs.27.40 per share last week. The government holds a 79.64% stake in the company