May 14, 2015 2:28:58 am
With the largest ever target for mop up from disinvestment in 2015-16, the government on Wednesday decided to sell 10 per cent of its stake in Indian Oil Corporation and five per cent stake in NTPC Ltd that would together help raise over Rs 13,600 crore.
The decision is understood to have been taken at a meeting of the Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi.
The Union Budget 2015-16 has pegged proceeds from disinvestment at Rs 41,000 crore. Though a number of approvals for stake sales in public sector units are already in place, disinvestment in IOC and NTPC are expected to mop-up big-ticket funds. The Centre currently holds 68.57 per cent stake in IOC, which is the country’s largest fuel retailer. It had earlier sold five per cent stake in the PSU in March 2014 through an off-market transaction that had raised Rs 5,340 crore.
The sale of 24.27 crore shares, or 10 per cent stake, in IOC would mop up close to Rs 8,000 crore at current market price.
Meanwhile, the sale of five per cent equity in power producer NTPC amounting to 41.22 crore shares could raise Rs 5,600 crore for the exchequer. The Centre currently holds 74.96 per cent in NTPC. It had sold 9.5 per cent of its stake in the power PSU in February 2013, raising Rs 11,500 crore.
However, scrip of the two firms registered mixed responses from investors after the decision. While the IOC scrip gained 0.5 per cent on the Bombay Stock Exchange to close at Rs 334.45 apiece on Wednesday, NTPC scrip fell 2.47 per cent to end the day at Rs 138 apiece.
Finance ministry sources said no decision has been taken on a timeline for the two stake sales, adding that it would depend on market conditions.
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