Cabinet defers decision on NHPC stake sale

NEW DELHI: The government today deferred a decision on 11.36 per cent stake sale plan in hydel power producer NHPC.

The proposed stake sale would fetch about Rs 1,850 crore to the exchequer at current market prices.

"The decision on NHPC stake sale has been deferred," a source said after the meeting of the Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Manmohan Singh.

Sources said there were differences between the Power Ministry and the disinvestment department over the stake sale in NHPC. The power ministry wanted the stake sale to happen only when market conditions improved.

The government had selected three merchant bankers -- Credit Suisse, HSBC and SBI Cap -- for managing NHPC stake sale.

The government plans to sell 11.36 per cent of its stake or 120 crore shares in NHPC through an Offer for Sale (OFS) in the domestic market.

At the current market price of Rs 15.45 apiece, the stake is valued at about Rs 1,854 crore.

The government currently holds 86.36 per cent stake in NHPC. The hydro-power generator listed on the bourses in 2009 after the promoter divested a 5 per cent stake and the company issued 10 per cent fresh equity.

The paid-up equity capital of the company, as of March 31, 2012, was Rs 12,300.74 crore.

While the disinvestment department is eager to offload shares in NHPC, the Power Ministry has been asking for time, citing valuation issues.

Up to 10 per cent of the OFS would be reserved for the company's employees and the shares would be offered to them at a 5 per cent discount to the issue price.

Government plans to garner Rs 40,000 crore through disinvestment in the current fiscal. It has already raised about Rs 1,323 crore through stake sale in MMTC, Hindustan Copper, National Fertiliser, Neyveli Lignite, STC and ITDC so far this year.