Ministry against further stake dilution in Nalco

The Mines Ministry said on Thursday that it was against divesting further stake in the state-run National Aluminium Company Ltd （Nalco）.

The Mines Minister, Mr B.K. Handique, said that he would ask the Finance Ministry to exempt Nalco from a Government rule that requires all listed companies to have a minimum 25 per cent public holding.

Exemption sought

“We are seeking an exemption for Nalco from this rule,” Mr Handique said stating that his Ministry was not in favour of any further divestment in the aluminium producer. The Government owns 87.15 per cent stake in Nalco, while the rest is held by public.

Mr Handique said Nalco has sufficient cash flows and that the company does not need any funds to meet its requirement. Also, the Nalco employees and the management were against further dilution of the Government stake in the company, he said.

The Mines Ministry joins the Coal Ministry in raising a dissent over the Government's 25 per cent minimum public float rule.

On Wednesday, the Coal Minister, Mr Sriprakash Jaiswal, had said that the disinvestment in Coal India through an initial public offer will not exceed 10 per cent. “If there is a Government rule for 25 per cent, there will be a special concession for Coal India,” Mr Jaiswal had said.

Earlier in May, the Mines Ministry had turned down the Finance Ministry's request for further dilution of Government stake in Nalco stating that the aluminium producer was doing well and did not require any funds. The Department of Disinvestment under the Finance Ministry had asked the Mines Ministry in March to consider a 10 per cent dilution of Government stake in Nalco.

Nalco shares shed Rs 3.1 or （0.7 per cent） on the BSE to close at Rs 433.35 on Thursday. Nalco had clocked a profit of Rs 832.6 crore on revenue of Rs 5,158 crore for financial year 2009-10 as against a net profit of Rs 1,272.27 crore on revenue of Rs 5,230 crore in the previous year.