The finance ministry has asked the power ministry to include National Hydroelectric Power Corporation in the list of companies in which the government intends to dilute its holding through initial public offers.
The government wants to sell a part of its holding in the power utility through the IPO to raise funds. The Centre has set itself a divestment target of Rs 4,000 crore (Rs 40 billion) for the current fiscal year and has raised Rs 2,600 crore (Rs 26 billion) from the sale of a 5.2 per cent stake in National Thermal Power Corporation.
The Divestment Development: Complete Coverage
Power Grid Corporation of India Ltd and Power Finance Corporation, two other public sector companies, are on the list of companies that will go in for IPOs this fiscal year.
The power ministry has been opposing the sale of the government's holding in NHPC, as the company is still dependent on budgetary support.
During the Tenth Plan, NHPC was slated to get a budgetary support of around Rs 14,000 crore Rs 140 billion). In the current fiscal year, the government has pumped in Rs 700 crore (Rs 7 billion) already. The Centre was initially in favour of postponing the public offer to 2005-06.
The Centre has not finalised the extent of equity to be sold in Power Grid and PFC. The two companies have been asked to work out the number of fresh shares they propose to issue and the government will sell a matching number through the IPOs. Although the power ministry has agreed to divesting stake in PFC and Power Grid, it has not moved forward on the proposal.
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