Disinvestment Current Affairs

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Oil India, NTPC to be disinvested

In a move directed towards achieving the target of Rs.30,000 through disinvestment, the government has decided divest 10 % stake in Oil India and will also dispose of 9.5 % holding in NTPC in January and February 2013.

How much could it fetch?

The 10 % stake in Oil India could generate around Rs.2,700 crore at current market prices. The 9.5 % stake sale in National Thermal Power Corporation (NTPC) could fetch over Rs.12,000 crore for the exchequer. The government proposes to divest in NTPC through the Offer for Sale (auction) route.

In this fiscal, the government has so far managed to raise over Rs.6,900 crore through minority stake sales in PSUs.

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Hind Copper disinvestment rescued by LIC and PSU banks

In the direction of achieving Rs 30,000 crore target for fiscal 2012-13 by disinvesting PSUs, the government of India managed to yield Rs 800 crore by selling shares of Hindustan Copper. The sail was mainly on support from the Life Insurance Corporation and public sector banks. The offer for sale (OFS) saw lukewarm response from large foreign institutional investors and private domestic investors like mutual funds.

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CCEA clears 9.5% stake sale in NTPC

The Cabinet Committee on Economic Affairs (CCEA) has approved disinvestment of 9.50% equity in NTPC, out of its holding of 84.50% via an offer for sale of shares via stock exchanges as per SEBI Rules and Regulations. Govt hopes to fetch Rs.13,000 crore via this equity divestment.

Post-disinvestment, the government’s stake in NTPC will come down to 75% and this will assist NTPC in complying the minimum public shareholding norms.

  • NTPC is a listed ‘Maharatna’ public sector undertaking (PSU) engaged in power generation.
  • NTPC became public with its initial public offering hitting the market in 2004.
  • In 2009, the government further diluted its stake in the company through Follow-on Public Offer (FPO).

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