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September 9, 2010India has divested small equity stakes in a number of state owned Commodity Companies this year and the trend is expected to continue in the future as well.Metal Mining company NMDC and Oil/Gas Player OIL India were sold earlier this year and Coal India Limited (CIL),Hindustan Copper and MMTC are also in the pipeline.Besides Commodity Companies,the Government has also raised money through Follow on Offerings and IPOs of Power Companies like SJVN ,NTPC and REC.The performance of these companies after listing has been mixed with a number of offerings trading at below their issue prices.But this has not deterred the government which find itself in a Sweet Macroeconomic Spot.Manganese Ore India Limited (MOIL) as the name implies is involved in the mining of Manganese Ore mainly in the states of Maharashtra and Madhya Pradesh with an annual revenue figure of around $400 million with 15% Net Profit Margin.The Federal Government and the Provincial Governments will sell a total of 20% stake in the company.
The Troubles in West have magnified the growth potential of the Indian Economy which grew a record 8.8% in the 2nd quarter of 2010.India has received a massive $14 Billion in FII investment this year following a record $18 billion in 2009.The Indian Stock Markets are currently making new highs even as the Developed Markets of US,Europe and Japan faced Fiscal Deficit,Sovereign Debt and Double Dip Problems.The Government is taking advantage of this interest to sell the stakes at relatively high prices.Some of The companies which have bombed due to excessive valuation have been saved by state owned giant funds like LIC,SBI and others.
Manganese Ore gets go ahead to offload 20% through IPO – BS
The government today approved disinvestment in manganese miner MOIL through public offer, where Centre will offload 10 per cent equity, in addition to 5 per cent each by Madhya Pradesh and Maharashtra.Manganese Ore operates 10 mines, six of which are located in Nagpur and Bhandara districts in Maharashtra, and four in Balaghat district of MP. It had a net profit of Rs 240 crore in 2009-10, while its net worth stood at Rs 1,587 crore.MOIL is the third steel PSU in which the government is divesting its stake. After the NMDC stake sale, the follow-on-offer by SAIL is in the pipeline.