Sunday, July 21, 2013

Sebi allows preference to Tamil Nadu government in Neyveli stake sale

New Delhi:20 Jul 2013

Sebi in a communication to the Disinvestment Department has said other states in which Neyveli\'s generating units are located should also be given preference in allotment of shares.

\"It has been treat QIBs belonging to government of Tamil Nadu as separate QIBs...for the purpose of allotment in IPP,\" Sebi\'s letter said.

Tamil Nadu government has been insisting that it would buy the entire central government stake that is being divested in the state lignite mining and power producing company.

Market regulator Sebi had earlier this month given its consent to state government\'s proposal, provided the acquisition is done by a qualified state entity through the IPP route.

The TN government has said it has 5 state PSUs which can be qualified as QIBs. The DoD has sought exemption from Sebi so that preference is given to allot shares to these PSUs only

The Sebi letter further said that the institutional placement programme (IPP) would be subject to the pricing norms for qualified institutional placement and lock-in regulations.

Sebi said preference can be given to the qualified institutional buyers belonging to the state government where NLC\'s units are located, over the mutual fund and insurance companies.

Earlier this week, the Empowered Group of Ministers (EGoM) cleared the disinvestment of 3.56 percent stake in Neyveli Lignite through an IPP.

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