The Indian government is reportedly mulling a 5-7% stake sale in the Container Corp of India (CONCOR) following a lacklustre response to its strategic sale plan.
What Happened: The government is now considering alternatives such as an offer for sale or a qualified institutional placement (QIP) for the stake sale after its plan to privatise CONCOR via a strategic sale received lukewarm response from suitors, Moneycontrol reported.
Based on its current market capitalisation, the stake marked for sale in CONCOR is estimated to be worth about ₹3,500 crore- ₹4,700 crore.
The divestment of CONCOR has been indefinitely suspended due to the absence of potential buyers, several government officials told the business publication. Factors like the company’s failure to lower its land leasing fee and lack of backing from the Ministry of Railways have reportedly discouraged potential buyers.
See Also: Nephro Care IPO Day 3 Subscription At 363 Times: Check Latest GMP
The government’s revised plan involves selling stake in CONCOR in smaller chunks, with discussions ongoing with financial institutions. The decision to sell a smaller stake comes amid a considerable surge in the company’s valuations, with its market capitalisation increasing by 200% to ₹62,470.95 crore since the divestment approval in November 2019.
CONCOR is also projected to transition its inland terminals to the government’s new land-licence fee regime in 2024-25, which could aid in reducing its land licensing fees outgo.
Price Action: Shares of CONCOR settled 1.24% lower at ₹1,023.55 on Tuesday.
Read Next: CDSL Approves 1:1 Bonus Issue Announces Record Date For Dividend
Engineered by Benzinga Neuro, Edited by Nivedita Hazra
The GPT-4-based Benzinga Neuro content generation system exploits the extensive Benzinga Ecosystem, including native data, APIs, and more to create comprehensive and timely stories for you. Learn more.
Don't miss a beat on the share market. Get real-time updates on top stock movers and trading ideas on Benzinga India Telegram channel.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.