The Cabinet on Wednesday approved the stake sale of blue-chip Indian Oil Corporation (IOC) and state-owned power major National Thermal Power Corporation limited (NTPC) in a hope that the Government may fetch around Rs13,600 crore. The approvals are part of Rs41,000 crore disinvestment target for the current financial year.
The Government will sell its 10 per cent stake in IOC and 5 per cent in NTPC to mop up about Rs13,600 crore in this fiscal's first disinvestment approval. A decision to stake sale in IOC and NTPC was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Narendra Modi, sources said.
Buoyed by diesel price deregulation, the Government is looking at selling stake in Indian's largest fuel retailer IOC for the second time in 13 months. Sale of 24.27 crore shares, or 10 per cent stake, in IOC would mop up close to Rs8,000 crore at current market price. A total of 41.22 crore shares, or 5 per cent, in NTPC could fetch Rs5,600 crore to the exchequer at current rates. The government had last sold stake in NTPC in February 2013.
Stake sale of IOC and NTPC together would fetch Rs13,600 crore. Although it's not clear which PSU would hit the markets next, sources said the Disinvestment Department is "watching things closely and as and when it feels proper, the share sales would happen." The Government has set the ball rolling for PSU stake sale in the current fiscal. It sold 5 per cent in REC and raised Rs1,550 crore last month. The Government currently holds 68.57 per cent in IOC and 74.96 per cent in NTPC.