The government on Thursday approved a 9.5 per cent stake sale in state-run power producer NTPC, hoping to garner around Rs 13,000 crore. ‘The Cabinet Committee on Economic Affairs (CCEA) has approved 9.5 per cent paid-up equity capital ( about 78.33 crore shares) in NTPC out of the government’s shareholding of 84.50 per cent, a proposal by the Department of Disinvestment, Ministry of Finance,’ said sources.
At the current market price, the stake sale is likely to fetch Rs 13,000 crore for the exchequer. However, it has failed to come out with any public offering in over seven months of fiscal 2012-13. The government has set itself a disinvestment target of Rs 30,000 crore for the current fiscal.
The government holds an 84.5 per cent stake in NTPC, a Maharatna company. Post-disinvestment, the government stake would come down to 75 per cent, which would also help NTPC to comply with the minimum public shareholding norms.
Meanwhile, the government has decided to re-allocate three coal blocks that were taken away from NTPC for delay in the development of those mines, sources said. With the re-allocation of these blocks, the overall valuation of NTPC is expected to go up. This, in turn, would help the government get higher returns from the proposed share sale.
NTPC became public with its IPO hitting the market in 2004. Thereafter in 2009, the government further diluted its stake in the company through a follow-on public offer (FPO).
The power generation company had reported a net profit of Rs 9,223.73 crore in the last fiscal (2011-12) against Rs 9,102.59 crore in the 2010-11. Its market capitalisation at 1,34,194.93 crore at the end of March 2012. Shares of NTPC closed at Rs 163.70, up 1.05 per cent at the BSE, on Thursday.
At the current market price, the stake sale is likely to fetch Rs 13,000 crore for the exchequer. However, it has failed to come out with any public offering in over seven months of fiscal 2012-13. The government has set itself a disinvestment target of Rs 30,000 crore for the current fiscal.
The government holds an 84.5 per cent stake in NTPC, a Maharatna company. Post-disinvestment, the government stake would come down to 75 per cent, which would also help NTPC to comply with the minimum public shareholding norms.
Meanwhile, the government has decided to re-allocate three coal blocks that were taken away from NTPC for delay in the development of those mines, sources said. With the re-allocation of these blocks, the overall valuation of NTPC is expected to go up. This, in turn, would help the government get higher returns from the proposed share sale.
NTPC became public with its IPO hitting the market in 2004. Thereafter in 2009, the government further diluted its stake in the company through a follow-on public offer (FPO).
The power generation company had reported a net profit of Rs 9,223.73 crore in the last fiscal (2011-12) against Rs 9,102.59 crore in the 2010-11. Its market capitalisation at 1,34,194.93 crore at the end of March 2012. Shares of NTPC closed at Rs 163.70, up 1.05 per cent at the BSE, on Thursday.