Centre to divest NTPC, SJVNL

With disinvestment back on the government’s agenda, the Cabinet Committee on Economic Affairs (CCEA) on Monday approved partial dilution of the Centre’s holding in two power utilities – NTPC and Satluj Jal Vidyut Nigam (SJVN). As per the norms, the proceeds of the disinvestments will go to the National Investment Fund (NIF), which was instituted in 2005. Disclosing the decision of the meeting of the CCEA chaired by the Prime Minister, Dr Manmohan Singh, the commerce and industry minister, Mr Anand Sharma, said that the government has decided to offload five per cent of its holding in NTPC and 10 per cent of its holding in SJVN, a joint venture company in which the Centre has 75 per cent and the Himachal Pradesh government, 25 per cent. In NTPC, which made an IPO in 2004, the government will divest stake through a follow-on public offer. “The funds would be raised through the follow-on public offer (route),” power secretary, Mr H. S. Brahma said, adding that the FPO can be expected by December this year. Since the government currently holds 89.5 per cent stake in NTPC, after disinvestment its holding in the company would come down to 84.5 per cent. “To make it inclusive and participatory, part of the shares would be offered to the employees of the state-run firms,” Mr Sharma said, adding that the decision is in line with the President, Mrs Pratibha Patil’s speech to the opening joint session of Parliament in which she announced that “the government would strive to broad-base the holding in the government companies by offering shares to people at large”. Given the current market conditions, the company would be able to mop up around Rs 8,500 crore through the stake sale. NTPC’s market capitalisation stands at Rs 1,77,350 crore. The CCEA also approved offloading 10 per cent of the Centre’s 75 per cent stake in SJVNL. Similarly the proceeds of this will also go into the NIF. The government can use 25 per cent of the interest accrued on the fund for social sector schemes.

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