NTPC, BEL disinvestment process begins with road shows abroad

GN Bureau | October 7, 2015


#PSU   #NTPC   #BEL   #Power Finance Corporation   #IOC   #Dredging Corporation   #Rural Electrification Corporation  


The global roadshows at four locations to attract investments for its big-ticket stake sale in the country’s largest power producer NTPC and BEL began on Monday (Oct 5). The campaign that may fetch around Rs 6,600 crore to the exchequer, will end on October 10.

The ministry of power and NTPC both are conducting roadshows in Singapore, Hong Kong, London and in the US. Roadshows are being held in San Francisco, Boston and New York.

The cabinet has already approved 5 per cent stake sale in NTPC. Both NTPC and Bharat Electronics Limited form part of the basket of two public sector units, which the department of disinvestment had created earlier this year.

According to officials, the government will go ahead with the disinvestment of the two companies based on investor responses in the roadshows and the domestic equity market conditions.

The government has so far been able to collect only Rs 12,600 crore from stake sale of four PSUs - Power Finance Corporation, IOC, Dredging Corporation and Rural Electrification Corporation. For the current fiscal, it plans to raise Rs 69,500 crore, including Rs 41,000 crore via disinvestment of Central Public Sector Enterprises (CPSE) and Rs 28,500 crore from strategic sale of PSUs.

If government achieves Rs 30,000 crore this year, it would still be the highest-ever disinvestment kitty in a year for the government.

The government had in August appointed Deutsche Bank, ICICI Securities, SBI Capital Markets and Edelweiss Financial Services as merchant bankers for the second basket -- which apart from NTPC and BEL, also has Engineers India, NALCO and Hindustan Copper.

DoD had decided to bundle the PSUs in order to reduce the number of roadshows to be conducted by the merchant bankers as that can be clubbed for companies in similar sector.

Finance minister Arun Jaitley last week reviewed the situation in the government's divestment programme in connection with generating revenue, and announcements of stake sale would be made at the appropriate time.

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