NLC India OFS: Navratna PSU NLC India stock declined almost 5% on Tuesday, 9 June after the Government on Monday unveiled an Offer for Sale (OFS) in the firm, formerly known as Neyveli Lignite Corporation, offering up to a 3% stake in the state-run company, including a green shoe option. The move comes on the back of successful stake sales in NHPC, Coal India and Central Bank of India, as the government continues to push ahead with its disinvestment programme in FY27.
The stock fell as much as 4.6% to its day’s low of ₹320 on BSE. The stock has lost 7% in last 1 week and 2% in last 1 month. Meanwhile, it has added 35% in 3 months and over 33% in the last 1 year.
The OFS consists of a base offer of 2% equity and an additional 1% green shoe option that can be exercised in the event of strong investor demand. The floor price for the issue has been fixed at ₹303 per share.
The offer opens for non-retail investors on June 9, while retail investors will be able to participate on June 10. The OFS will be conducted through a separate window on stock exchanges between 9:15 am and 3:30 pm on the respective trading days.
Announcing the transaction, DIPAM Secretary Arunish Chawla said in a post on X, “Government of India announces OFS in NLC India Limited (formerly Neyveli Lignite Corporation) with a base offer of 2% of its equity and an additional 1% Green Shoe Option in case of oversubscription. Floor price fixed at ₹303 per share.”
Highlighting the company’s operational performance and shareholder returns, Chawla added, “With strong operational and financial performance, consistent returns and attractive dividends, NLC continues to offer a compelling long-term investment opportunity.”
Offer Structure and Investor Participation
Under the offer structure, the government will initially sell around 2.78 crore equity shares, representing a 2% stake in NLC India. In case the green shoe option is exercised, an additional 1.39 crore shares, equivalent to another 1% stake, will be sold. This would take the total number of shares on offer to nearly 4.16 crore and the total stake dilution to 3%.
NLC India clarified in its filing that if the oversubscription option is exercised, the combined 4,15,99,098 shares forming the base offer and additional offer will collectively be treated as “Offer Shares”. If the green shoe option is not exercised, only the shares under the base offer will be considered as the offer shares.
The OFS reserves 10% of the offered shares for retail investors. Eligible employees will also receive special benefits under the issue structure. Up to 25,000 shares have been reserved for employees, who will be entitled to a 5% discount on the cut-off price.
Employees can submit bids worth up to ₹5 lakh. However, allocations will initially be considered only for bids up to ₹2 lakh. Only non-retail investors are permitted to place bids on June 9.
The government has appointed ICICI Securities and DAM Capital Advisors as brokers to manage the stake sale.
As of the March quarter, the Government of India held a 72.2% stake in NLC India.
Nuclear Expansion Plans
In another recent announcement, the Navratna public sector enterprise signed a memorandum of understanding (MoU) with Nuclear Power Corporation of India Ltd (NPCIL) to establish a joint venture for nuclear power projects in India.
The company informed stock exchanges on May 25 that the partnership is aimed at deepening cooperation in the nuclear energy sector and supporting future power generation capacity. Under the proposed arrangement, NLC India and NPCIL will jointly develop 700 MW indigenous Pressurised Heavy Water Reactor (PHWR)-based nuclear power projects while also exploring other suitable reactor technologies based on mutually agreed terms.
Government Divestments
The NLC India OFS follows a series of successful government divestments this financial year. With proceeds from earlier transactions, the government has already raised ₹12,165.85 crore through three stake sales in FY27, and NLC India is set to become the fourth divestment transaction of the fiscal year.
Earlier, NHPC’s OFS received a strong response from investors and helped the government raise around ₹4,300 crore. Against an offer size of 60.27 crore shares, investors placed bids for 151.33 crore shares, according to BSE data.
Before NHPC, the government raised ₹5,542 crore through the sale of a 2% stake in Coal India and mobilised another ₹2,266 crore by divesting an 8.08% stake in Central Bank of India.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
