NBCC fixes IPO price band at Rs 90-106/share
"If DGCA gives a report that safety cannot be assured certainly we will take action. We can cancel their license," he said.
State-run National Buildings Construction Corporation (NBCC) has fixed a price band of 90-106 rupees for its intial share sale that aims to raise up to 1.27 billion rupees, it said in a newspaper advertisement on Tuesday.
The government plans to sell a 10 percent stake in NBCC, which is a consultant for civil construction and real estate projects.
Enam and IDBI Capital are the merchant bankers to the issue, which opens on March 22 and closes on March 27.
The share sale will be the government's first since a $2.6 billion auction in Oil and Natural Gas Corp earlier this month failed to attract enough investors, forcing state-run Life Insurance Corp to pick up most of the 5 percent stake on offer.
The government has set an ambitious target to mop-up Rs 40,000 crore from disinvestment of public sector units this fiscal, but due to volatile market conditions, only about Rs 14,000 crore has been realised.
Despite not being able to meet its target in 2011-12, the government plans to sell equity in blue-chip companies like SAIL, MMTC, Neyveli Lignite, Nalco and Oil India, to mop up Rs 30,000 crore in the next fiscal.
As per the Red Herring Prospectus of NBCC filed with the SEBI, the construction major has proposed to make an initial public offer (IPO) of 1.2 crore equity shares of face value of Rs 10 each.
NBCC is engaged in the business of providing project management consultancy (PMC) services for civil construction projects, civil infrastructure for power sector and real estate development.
Rating agency CARE has assigned 'IPO Grade 4', indicating above average fundamentals, to the proposed NBCC IPO.
As on January 31, 2012, it has a total order book of Rs 106,13.6 crore for PMC and Civil infrastructure for Power sector businesses together.
In 2010-2011, the company reported a total income of Rs 3,230.7 crore and profit after tax of Rs 140.4 crore.
Original story by Thomson Reuters 2012; inputs from PTI
