Keeping its agenda of disinvestment rolling on, the government is in full speed to finalise stake sale proposals. After power major NHPC and petroleum PSU OIL, the government is now getting ready the plans to dilute 5% stake in the power PSU NTPC. Current holding of the government in the company stands at 89.5% and its plans to bring the same down to 84.5%.
The power ministry is understood to have already completed the formalities relating to due diligence procedures and the proposal is expected to be sent to the Cabinet soon. After the approval from the cabinet committee on economic affairs (CCEA), the company would ready a follow-on public offer with the market regulator Securities and Exchange Board of India.
The sale will bring revenue of close to Rs 7,500 crore to the government if the offer is priced at current market price of the company’s share. While some quarters in the government have expressed apprehensions that power IPOs have already flooded the markets and the issue may face some challenge on appetite front, the company believes that given its low float presently, there would be no problem in attracting investors.
Even if the government does not take any other disinvestment in the current fiscal, the three consisting of OIL, NHPC and NTPC would give it proceeds of close to Rs 15,000 crore, which though lower than Rs 25,000 crore mentioned in the Economic Survey for 2008-09, is much higher than meagre figure of nearly Rs 1,000 crore given by the finance ministry in the Union Budget for current fiscal.