New Delhi: The government has initiated the process for the disinvestment of 10 percent equity capital in defence PSU MIDHANI (Mishra Dhatu Nigam Limited) through OFS (offer for sale), an official notification showed. A request for proposal published by DIPAM (Department of Investment and Public Asset Management) recently sought to engage merchant bankers and brokers for the disinvestment of part of government stake in MIDHANI. "The Gol intends to disinvest 10 percent paid-up equity capital of MIDHANI out of its shareholding of 74 percent, through 'Offer for Sale' (OFS) method of shares by promoters through the stock exchanges' as per Securities and Exchange Board of India (SEBI) Rules and Regulations," the DIPAM notification said.
The authorised share capital of MIDHANI is Rs 200 crore and the paid-up equity capital is Rs 187.34 crore as on March 31, 2019. The government holds 74 percent of the equity of MIDHANI. The face value of each equity share is Rs 10. MIDHANI's Profit after Tax for fiscal year 2018-19 stood at Rs 131.04 crore. As on March 31, 2019, it has a net worth of Rs 834.71 crore, the notification said.
The government is also considering allotting shares to eligible and willing employees of MIDHANI at a discount to the issue/discovered price (lowest cut off price) up to a maximum of certain percentage of the OFS size, subsequent to the completion of the transaction under OFS. "The percentage and extent shall be decided in due course. Merchant bankers/ Selling Brokers will be required to render such assistance as may be required in this connection," the notification said.
The government has so far raised Rs 34,845.06 crore through disinvestment, lagging far behind its revised estimate of Rs 65,000 crore with only seven days to go for the financial year to end. The Coronavirus outbreak has put various deals on hold, with the government deciding to defer Air India sale. The government was hoping to earn the balance amount of its target from the NTPC-THDC-NEEPCO deal and a bunch of other minority stake sales, most of which have been held up or the last dates have been deferred because of the Coronavirus pandemic.