The government will sell 3% stake in NLC India through OFS, setting a floor price of Rs 303

The government on Monday announced an offer for sale (OFS) in state-run NLC India, seeking to sell its 3% stake through a two-day share sale process. The OFS consists of a base offer of 2% equity, equivalent to 2.78 crore shares, with a greenshoe option of another 1% stake or 1.39 crore shares in case of strong investor demand.

The government has paid Rs. 303, which is a discount to the previous closing price of the stock. Based on the floor price, the government through a base offer of about Rs. 842 crore to be collected. If the greenshoe option is fully exercised, the total issue size will increase to around Rs. 1,263 crore can be done.

The OFS will open to non-retail investors on June 9, while retail investors and eligible employees can bid on June 10. The sale of shares will be conducted through a separate window mechanism on BSE and NSE in line with SEBI’s OFS framework.

The transaction is part of the government’s broader disinvestment program and comes amid a strong run in PSU stocks over the past few years.

NLC India, formerly known as Neyveli Lignite Corporation, is one of India’s leading mining and power generation companies. The company operates lignite mines and thermal power stations while also expanding its renewable energy portfolio.

PSUs have emerged as beneficiaries of India’s growing power demand and government focus on energy security. In recent years, the company has diversified beyond lignite mining into solar and other renewable energy projects as part of its long-term growth strategy.

The government while announcing the OFS highlighted NLC India’s strong operational and financial performance, describing the company as a long-term investment opportunity backed by consistent profitability and dividend payouts.

NLC India has maintained a track record of returning cash to shareholders through regular dividends and has benefited from improved plant performance, higher power generation and growth in mining operations.

OFS comes at a time when institutional and retail participation in government stake sales has been healthy, especially in profitable PSUs with stable cash flows and attractive dividend yields.

Investors will now closely watch subscription levels to gauge demand for the issue, especially given the government’s decision to keep the greenshoe option, which allows it to sell an additional 1% stake if the offer is oversubscribed.