New Delhi, Apr 8 (PTI) Government's ambitious divestment programme for the current fiscal began on a strong note today, with the Offer For Sale (OFS) of 5 per cent stake in state-run REC getting over-subscribed in just about an hour.
The government is looking to raise Rs 1,550 crore from sale of 4.93 crore shares in Rural Electrification Corp (REC) through a one-day OFS route at a floor price of Rs 315 apiece.
The share sale, which began at 0915 hours, received strong response from institutional investors and portion reserved for them was subscribed 1.18 times by 1025 hours itself.
The portion reserved for the retail investors, who are also getting 5 per cent price discount, was subscribed 47 per cent, as per the stock exchange data.
Overall, the Offer was subscribed 1.04 times and the the over-subscription may rise further during the day as bidding will continue till 1530 hours.
As against a floor price of Rs 315 a share for the OFS, REC shares were trading at Rs 323.60, up 0.61 per cent in early trade on the BSE.
Government holds 65.64 per cent stake in REC. As much as 20 per cent of the offer size is reserved for retail investors, who can bid for shares worth Rs 2 lakh.
Besides, 25 per cent of the offer would be alloted to mutual funds and insurance companies. REC is the first PSU to hit the market in the current fiscal.
The government has budgeted to raise Rs 41,000 crore through minority stake sale in 2015-16.
The disinvestment department has a pipeline of companies to sell minority stake to avoid bunching up of disinvestment towards the end of end of the fiscal.
The companies which have been lined up for disinvestment include BHEL, Dredging Corporation, NALCO, IOC and NMDC.
J M Financial, Morgan Stanley and IL&FS Broking Services are acting as merchant bankers to the REC issue. In 2014-15, government had raised about Rs 24,500 crore through disinvestment.