CCEA clears stake sale in STC, ITDC, aims around Rs 30 cr

New Delhi: The Cabinet Committee on Economic Affairs (CCEA) today approved disinvestment of government stake in State Trading Corporation (STC) and ITDC, which would fetch around Rs 30 crore to the exchequer.

The disinvestment department had sought Cabinet nod to offload 5 percent stake in India Tourism Development Corporation (ITDC) and 1.02 percent in STC through the Offer For Sale (OFS) route.

  CCEA clears stake sale in STC, ITDC, aims around Rs 30 cr

Hoping to earn Rs 30 crore. Reuters

"STC, ITDC disinvestment has been approved," sources said after the meeting of the CCEA.

The government expects the sale of 5 percent stake or 42.88 crore shares in ITDC to fetch Rs 23.58 crore.

Besides, it aims to garner about Rs 10 crore through disinvestment of 1.02 percent, or 6.13 crore shares, in STC.

The government currently holds 92.11 percent stake in ITDC and 91.02 percent stake in STC.

The stake sale would help both the companies meet the minimum 10 percent public holding norm of market regulator Securities and Exchange Board of India (Sebi).

The government is required to bring down its stake in these two companies to 90 percent by 8 August.

Shares of STC were trading 5.75 percent lower at Rs 99.20 on the BSE in afternoon trade.

At the end of 2012-13 fiscal, the paid up capital of ITDC stood at Rs 86 crore and earned a net profit of Rs 19 crore.

For STC, the paid up capital stands at Rs 60 crore and net profit at Rs 18 crore for 2012-13 fiscal.

Once the proposal is approved by the CCEA, the Empowered Group of Ministers (EGoM) on disinvestment would decide on the floor price for stake sale in the two companies.

Further, the disinvestment department has also sought CCEA approval for allotting shares to employees of the companies at 5 percent discount to the last cut-off price in the OFS.

The government uses the OFS route, popularly known as auction method, to divest its stake in PSUs and to make firms compliant with minimum public holding.

The government targets to raise Rs 40,000 crore by way of disinvestment in the current fiscal. So far, it has raised Rs 828 crore through stake sale in MMTC and Hindustan Copper.

PTI

Updated Date: Dec 21, 2014 03:02:48 IST