The Central Government has successfully divested 9.2% of paid-up capital in National Aluminum Company Ltd. (NALCO) to raise ₹ 1,200 crore to begin FY 2017-18 with a bang. Department of Investment and Public Asset Management (DIPAM), Ministry of Finance, Government of India is set a record target of realizing ₹ 72,500 crore through disinvestment. This follows an all-time high achievement of ₹ 46,247 crore during 2016-17.

Originally, the disinvestment in NALCO OFS was pegged at 5% of paid-up capital, but seeing the overwhelming response from the market, DIPAM exercised the green shoe option to retain over-subscription and raised the offer to 9.2% on Wednesday,19th April, 2017. With this transaction, the Government of India shareholding in NALCO has come down to 65.37%.

If the original OFS offer of 5% is considered, the issue is over-subscribed by 2.56 times and if the revised offer of 9.2% is taken, the issue is subscribed 1.43 times. The green shoe option (over-subscription option) was used by the Government for the first time, since the modified OFS procedure spanning 2 days (T and T+1 day) was put in place by SEBI in 2016.

The retail investor continues to back disinvestments of CPSEs by DIPAM. For the fourth time in a row, retail investors out-performed institutional investors. This is particularly satisfying to DIPAM, as one of the objectives of disinvestment policy is to make PSU shareholding broad-based so that nation’s wealth is shared by its citizens.

Encouraged by the successful completion of NALCO OFS, DIPAM is gearing

- up for a series of disinvestments throughout the year to meet its target.

Green shoe option expands Offer for Sale allocation, enabling increased divestment and broader public participation in PSU shares. The Central Government increased an Offer for Sale from five percent to nine point two percent by exercising the green shoe option under the modified two-day OFS procedure, reducing its shareholding and realizing proceeds as part of DIPAM's broader disinvestment programme.