NLC India shares tumble 4% on government’s plans to sell 7% stake via OFS

Shares of NLC India dropped over 4% to a low of ₹217.3 apiece on NSE in Thursday's trade after the central government announced plans to sell up to 7% stake in the public sector undertaking (PSU) via an offer-for-sale (OFS).

NLC India, a Navratna PSU under the Ministry of Coal, is engaged in lignite production as well as the generation of thermal and renewable energy.

The company, in an exchange filing on Wednesday, informed that the Government of India will offload a 5% stake in NLC India (base offer size), with an option to additionally sell another 2% shares via offer-for-sale.

The OFS opened for non-retail investors on Thursday, March 7 with a floor price of ₹212 per share. Through this sale, the government aims to raise up to ₹2,000 crore to ₹2,100 crore. The offer for sale will open for retail investors on March 11.

The base offer will consist of the sale of approximately 6.93 crore equity shares, while the green shoe option will include 2.77 crore shares.

ICICI Securities and DAM Capital Advisors have been appointed as the brokers for the transaction.

In Q3FY24, NLC India reported a consolidated net profit of ₹250.4 crore, a significant improvement from the loss of ₹406.7 crore in the previous fiscal year. The consolidated revenue from operations for the same period fell 14% to ₹3,164.4 crore. EBITDA also saw a decrease of 33.5%, dropping to ₹904.7 crore from ₹1,359.7 crore in the same period previous fiscal.

Shares of NLC India Ltd closed 3.82% lower at ₹219 per share .