The Empowered Group of Minisiters (EGoM) has fixed MOIL (Manganese Ore India) IPO price band at Rs 340-375, reports CNBC-TV18's Aakansha Sethi.
The IPO (initial public offering) will open for subscription from November 26. The company will raise Rs 1238 crore from the primary markets.
The government will offload 20% stake in MOIL, in which Central Government will offload 10% stake and Madhya Pradesh Government will to offload 5% and Maharashtra Government to will offload 5% stake. Retail investors, employees will get 5% discount.
Here is a verbatim transcript of Aakansha Sethi's comments on CNBC-TV18. Also watch the accompanying video.
The price band set is along expected lines although some people were expecting a little bit higher. So possibly on the lower side. But that has been a government strategy to encourage response from retail investors to price it right.
The government is divesting about 20% in this company, 10% from the central government, 5% from the Madhya Pradesh government and 5% from the Maharashtra government. The issue is expected to get the government Rs 1238 crore.
It is a smaller issue as compared to the earlier Coal India issue but nonetheless it is an important one because this is a zero debt company. It has plans of diversification into wind energy as well. It is the only company of its kind in Manganese mining in India.
On government plans to increase participation:
As per government policy throughout all the disinvestment issues this year, we have seen that the government has given a 5% discount to retail investors as well as to employee quota. That is going to continue with this issue as well. So retail investors can look forward to a 5% discount. This is the only IPO now this year, all the other divestment issues coming up will be FPOs, which will be an added incentive.
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