The government is planning an overseas float of National Aluminium Company (Nalco) prior to its disinvestment locally.
The overseas float could either be through American depositary receipts (ADRs) or global depositary receipts (GDRs).
Pradip Baijal, secretary of the department of divestment (DoD), said the selloff process will be kicked off only after the issue of ADR/GDRs. The proposed Nalco issue will see the government go to the international markets after MTNL's ADR last April.
While Baijal did no offer any reasons for the government's decision, analysts said the overseas float will help get international valuation for Nalco, which is almost of a global standard.
The global float will also set an indicative price for the ensuing divestment of Nalco shares in the local market, they said.
Following the overseas issue, the government holding in Nalco would come down from 83 per cent to around 51 per cent, Baijal pointed out.
The DoD will invite expression of interest within a month of ADR/GDR issue, he said. Earlier, the centre had decided to defer disinvestment in Nalco till the second quarter of the next fiscal because of the poor performance of its stock on the local bourses. Nalco share price has been ruling below Rs 60 on the stock exchanges.
The centre is expecting a higher price from the sale of Nalco shares than the price it received by selling the Balco stake. Nalco is bigger in size and its business is more attractive than Balco's and other competitors.
