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Posted on Nov 22, 10:04PM | IANS
In a move aimed to cut fiscal deficit, the Cabinet Committee on Economic Affairs (CCEA) Thursday approved the proposal to disinvest 9.50 percent stake in state-run power major NTPC.
The scale of stake sale is about 783.3 million shares, equivalent to 9.5 percent dilution in the government stake in the power company. Currently, the government holds about 84.5 percent stake in NTPC. Following the disinvestment, the government's stake will come down to 75 percent.
The government is looking to earn Rs.13,000 crore from the disinvestment. It has set an overall disinvestment target of Rs.30,000 crore for the current fiscal.
There is, however, no public offering in this high profile disinvestment with no fresh equity involved.
The NTPC disinvestment is expected to take place by the end of the current fiscal, according to Power Secretary P. Uma Shankar.
Meanwhile in a separate decision, the cabinet also approved re-allocation to NTPC of three coal blocks that were taken away from the company for delay in the development of those mines.
The reallocation of coal blocks decision was confirmed to mediapersons Thursday by the power secretary.
With the re-allocation of blocks, the overall valuation of NTPC is expected to go up, which would help the government to get higher returns from the proposed share sale.
The power company had reported a net profit of Rs.9,223.73 crore in the last fiscal as against Rs.9,102.59 crore in 2010-11.
Shares of NTPC closed Thursday at Rs.163.70, up 1.05 percent at the Bombay Stock Exchange (BSE).