Mines ministry moots Nalco's foreign listing

The ministry of mines has mooted the idea of listing National Aluminium Company (Nalco) on the international markets when the government decides to sell a part of its stake in the company.

The ministry is in favour of off-loading 10 per cent shares of Nalco held by the government, in the international markets, to raise the company's profile before it embarks on the expansion outside India, sources said.

Nalco was one of the blue chip companies where the government wanted to sell its shares to build a corpus for national investment fund.

While agreeing to the proposal of the finance ministry on sale of Nalco shares, the mines ministry had suggested that instead of selling the company's shares in the domestic markets they should be sold abroad through American Depository Receipts (ADRs) or Global Depository Receipts (GDRs).

The sale of Nalco shares through ADR or GDR issue would also fetch the government higher returns than what it can get in the domestic market, they said.

If the proposed disinvestment is executed then the government's stake in the public sector behemoth would fall to 77.15 per cent from 87.15 per cent.

Nalco is planning to foray in the Gulf market by establishing a mega smelter there primarily to cater to the local market.

"We do plan to enter the Gulf countries to tap the markets there. Once the expansion plans were finalised, we would be in a condition to decide on ADRs and GDRs," said C R Pradhan, chairman and managing director of Nalco.

Pradhan said no timeframe could be set on when the company's overseas expansion would be finalised as a detailed feasibility study would have to precede the entire venture.

With China slowing down its imports of the metal, Nalco has no other option but to explore overseas opportunities especially in the Gulf countries.

A month ago the PSU slashed its production by certain quantity to avoid piling of inventories.

However, the Nalco's chief spokesman D Satpathy said, China's reduced intake of the metal would not have any adverse bearing on the company's productivity.

"Besides, China we do export to numerous nations. But in days to come prices are likely to stabilise and things would be smooth again," he added.