NALCO Current Affairs
The Central Government has raised Rs. 1,200 crore by divesting 9.2% of paid-up capital in National Aluminum Company Ltd. (NALCO). With this disinvestment, Government’s shareholding in NALCO has become 65.37%.
Disinvestment involves the sale of Government’s share in the Public Sector Undertakings. In disinvestment, the government sells only a part of the equity which is essentially less than 51% so that ownership and management rights can be possessed by the Government itself.
Department of Investment and Public Asset Management (DIPAM), Ministry of Finance, has set a record target of Rs. 72,500 crore to be realized through disinvestment in this fiscal. This target follows the 2016-17 all-time high achievement of Rs. 46,247 crore.
For the fourth time in a row, retail investors out-performed institutional investors. It shows that retail investor backs disinvestments of CPSEs. In fact it satisfies one of the objectives of disinvestment policy of the government which aims to make PSU shareholding as broad-based as possible so that nation’s wealth is shared by its citizens. In this disinvestment exercise, the government for the first time has used the green shoe option (over-subscription option) since the modified OFS procedure has been put in place by SEBI in 2016. DIPAM exercised the green shoe option owing to the overwhelming response from the market.
Greenshoe option is a special provision in an IPO prospectus. Green shoe option permits the underwriters to sell more share to the investors than originally planned by the issuer. This option is exercised if the demand for a security issue is higher than the expected.
The Department of Disinvestment was set up as a separate Department on 10th December 1999 and functions as one of the Departments under the Ministry of Finance since 2004. In 2016, the Department of Disinvestment was renamed as Department of Investment and Public Asset Management (DIPAM). DIPAM advises the Union Government in the matters of the financial restructuring of PSUs and also for attracting investment through capital markets. It deals with all matters relating to the sale of Union Government’s equity through private placement or offer for sale or any other mode in the erstwhile Central PSUs.
National Aluminium Company Limited (NALCO) is a Navratna CPSE functioning under Ministry of Mines. It was established on 7th January 1981. It has integrated and diversified operations in mining, metal and power.
State-owned power producer National Thermal Power Corporation (NTPC) and aluminium producer National Aluminium Co. Ltd (NALCO) have signed MoU to establish a 2.4 giga watt (GW) Coal based power project at Gajmara, Odisha.
The MoU will facilitate setting up of a Joint Venture (JV) Company between NTPC and NALCO. It also seeks to set up one million tonne aluminium production facility in Odisha.
- The proposed 2.4GW power plant at Gajmara will comprise three units of 800 megawatts (MW) each. It will source coal from the mines operated by NALCO.
- The power from plant will be provided to NAlCO’s factory at Angul which is aluminium smelter project (that converts raw material alumina into aluminium) and also Greenfield project at Kamakhyanagar in Dhenkanal district of Odisha.
- This JV project will act as a catalyst for industrial growth in the region creating direct and indirect employment for engineers, supervisors and skilled, semi-skilled and unskilled workers.
- It will strive to keep the cost of power generation to a minimum so as to benefit aluminium production for automobile and aerospace industries to improve energy efficiency.
About National Thermal Power Corporation Limited
- NTPC limited is a Central Public Sector Undertaking (CPSU), operational under the aegis of Union Ministry of Power. It is engaged in the business of generation of electricity and allied activities.
- It is India’s largest power generator company and accounts for 25% of total electricity generated in the country.
- Headquarters: New Delhi.
- Established: 1975.
- Union Government now holds 70% of its equity shares as of May 2015 (after divestment of its stake in 2004, 2010, 2013, and 2015).