Sale of stake in NTPC and Indian Oil okayed by cabinet

Sell-off in state run companies is critical to keep the fiscal deficit under check

GN Bureau | May 13, 2015


#stake sale   #NTPC   #Indian Oil   #national thermal power corporation   #cabinet  

The government has approved stake sales in giant state-owned units Indian Oil (IOC) and National Thermal Power Corporation (NTPC) to mop up close to Rs 10,000 crore. The proposal was cleared at union cabinet meeting on Wednesday.

While ten per cent stake in IOC would yield Rs 7,915 crore at the current price of Rs 326.70 a share, a 5 per cent equity offload in NTPC would give Rs 557 crore to the government at prevalent market price of Rs 134.80. These stake sales are part of the ambitious disinvestment drive to raise Rs 69,500 crore by March 2016. Sell-off in state run companies is a critical element of finance minister Arun Jaitley's plan to boost spending and yet keep the fiscal deficit under check.

As the news came out the IOC stock fell over 2 per cent, while the NTPC stock was trading nearly 5 per cent down. The two stocks underperformed the broader Nifty and the Sensex which were trading flat.

The government has set a target of Rs 41,000 crore from disinvestment in the current financial year against Rs 26,000 crore in the previous year. Besides, the government hopes to get Rs 28,500 crore from strategic sales.

The finance ministry has been pushing for sale of stake in Indian Oil during the last financial year but had to drop the plan as there was no clarity on the subsidy-sharing mechanism. The petroleum ministry had opposed it as the fall in crude prices have an impact on valuations. With oil prices beginning to rise and more clarity on subsidy sharing, the government seems to have taken up the Indian Oil stake sale.

Comments

 

Other News

On a personal note: DIVINE

An underground rapper who grew up on Mumbai streets, Divine spins his music around his environment and poverty. His breakout single, ‘Meri Gully Mein’, along with fellow rapper Naezy caught Bollywood’s attention. The Hindi film ‘Gully Boy’ is inspired by their lives and gr

The role model for an IAS officer

Anil Swarup, an IAS officer of Uttar Pradesh cadre who retired in 2018, is a model bureaucrat who retained his optimism right till the end of service and exemplified dedication and commitment. His excitement at the opportunities that a job in the IAS provided is evident on every page of his new book publis

Reform of the civil services: At home and away

The question of reform of the civil services has been debated extensively at all levels at least over the last five to six decades after independence. Indeed, it was soon perceived that the Indian Administrative Service (IAS) may not be well equipped to deal with the problems of an emerging developing coun

The greatest challenge for any government

Shouting vengeance at all and sundry while wriggling out of holes of our own making seems to be our very special national characteristic. Some recent instances are illustrative of this attribute. A number of business tycoons with thousands of crores of unresolved debts have fled abroad with the government

The mysterious case of CBI’s legality

The Central Bureau of Investigation (CBI) came into existence, based on a Resolution of the home ministry, dated April 1, 1963 – a sheer coincidence that it also happens to be April Fool’s day. Over the past few months, we have seen the CBI live up to its founding day with great zeal, being i

The Evolution of Modi

Gujarat was passing through a turbulent phase in the 1980s. The decade began middle class agitations against new reservation policies, and the caste friction turned communal under the watch of chief minister Madhavsinh Solanki, alienating majority of urban population on both counts. The ground was ripe for

Current Issue

Current Issue

Video

CM Nitish’s convoy attacked in Buxar

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter