Cabinet approves disinvestment of 15% in NBCC

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Shri Narendra Modi, has approved the disinvestment of 15% paid up equity of National Buildings Construction Corporation Limited (NBCC) out of Government of India’s 90% shareholding.

It would result in estimated receipts of Rs.1,706 crore approximately to the Government. However, the actual realization amount will depend upon the market conditions and the investor interest prevailing at the time of actual disinvestment.

The disinvestment would further broadbase NBCC’s shareholding and enhance the disinvestment receipts for making them available to the Government for utilization as per Disinvestment Policy. In order to inculcate a sense of belongingness amongst the employees of NBCC, it has also been decided to allot additional shares to the eligible and willing employees at a discount of 5% to the Issue/discovered (lowest cut off) price of the OFS.

Background:

NBCC was incorporated on 5th November, 1960 as a wholly owned Government of India enterprise under the administrative control of the Ministry of Urban Development with the objective of becoming a leading company in the field of construction, engineering and project management consultancy services.

The issue and subscribed equity capital as on 31.3.2016 was Rs.120 crore. Government of India holds 90% of the equity i.e. 54,00,00,000 share. The face value of each NBCC share is Rs.2/-. The balance 10% of the equity is held by the Public.

The NBCC IPO (Initial Public Offer) was launched in March, 2012, when the GoI divested 10% paid up equity capital of NBCC out of its 100% shareholding and got the Company listed on the stock Exchanges. The GoI realised Rs.124.97 crore as proceeds towards the share sale.