Government approves divestment in power firms
Posted on: 06:35 PM IST Oct 19, 2009
New Delhi: The Cabinet Committee on Economic Affairs (CCEA) has approved a proposal to divest stake in state-run utilities NTPC Ltd and Satluj Jal Vidyut Nigam Ltd (SJVN).
The Government will offload five per cent of its equity in NTPC and 10 per cent in SJVN, Commerce Minister Anand Sharma said in the Capital on Monday.
At the present valuation, the Government will be able to raise over Rs 8,800 crore by divesting five per cent stake in NTPC, which generates over 30,000 MW of power.
The Government's shareholding in the company would come down to 84.5 per cent after the divestment, Sharma told reporters.
"After disinvestment it is expected that the market capitalisation of NTPC would be higher and it would help the company to raise resources in the international market on competitive terms," he said.
The NTPC's market capitalisation currently stands at Rs 172,000 crore.
The Government had earlier clarified that there would be no fresh equity infusion but only the stake sale in NTPC.
SJVN is a 75:25 joint venture between the Central Government and Himachal Pradesh.
Sharma said the Central Government's stake would come down to 65 per cent after the divestment whereas the state's share would remain at 25 per cent.
At present the paid-up equity capital of the company is Rs 4,109 crore.