State-owned construction firm NBCC Ltd has sought shareholders' approval for stock split as the company is likely to launch follow-on public offer (FPO) under the government's disinvestment programme.
The National Buildings Construction Corporation Ltd (NBCC) has sought the shareholders' approval through postal ballot for "splitting of the company's equity shares of Rs 10 each into five equity shares of face value of Rs 2 each", it said in a regulatory filing.
NBCC has also sought the their approval for special resolution to change the company's name to NBCC (India) Ltd, according to the filing.
Explaining the rationale behind stock split, NBCC said that the "company has proposed to float fresh equity shares in the market along with the government of India's proposal to disinvest as per disinvestment policy and is likely to come up with Follow-on-Public offer (FPO)."
The government has 90 per cent stake in the NBCC.
"The market price of the equity shares of NBCC is fairly high and for wider participation of public it is proposed that the stock of the company be split up from its existing face value of Rs 10 each into five equity shares of Rs 2 each," it added.
Accordingly, NBCC said the approval of shareholders is required by way of ordinary resolution for split of equity shares of the company and consequential amendment of the capital clause of the memorandum of association.
The board had on March 11 approved the proposal for splitting of the company's equity shares.
NBCC's share price closed at Rs 933.80 apiece on the BSE, down 0.63 per cent.
Under its disinvestment programme, the government has mopped up Rs 19,517 crore so far this fiscal through stake sale in seven PSUs.
The government aims to collect Rs 56,500 crore through disinvestment in PSUs in 2016-17. Of this, Rs 36,000 crore is estimated to come from minority stake sale in PSUs, and the remaining Rs 20,500 crore is projected to come from strategic sale in both profit and loss-making companies.
