Cabinet approves 10% stake sale in IOC and 5% in NTPC: Govt source

NEW DELHI: The government will sell its 10 per cent stake in blue-chip Indian Oil Corporation ( IOC) and 5 per cent in power producer NTPC to mop up about Rs 13,600 crore in this fiscal's first disinvestment approval.

The approvals are part of Rs 41,000 crore disinvestment target for the current financial year.

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 Rs 8,000 crore at current market price.

A total of 41.22 crore shares, or 5 per cent, in NTPC could fetch Rs 5,600 crore to the exchequer at current rates. The government had last sold stake in NTPC in February 2013.

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.

Stake sale of IOC and NTPC together would fetch Rs 13,600 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 Rs 1,550 crore last month.

The government currently holds 68.57 per cent in IOC and 74.96 per cent in NTPC.

Shares of IOC were quoting at Rs 331.45, down 0.41 per cent, while NTPC was trading at Rs 136.85, down 3.29 per cent from its previous close on BSE.

For the current fiscal, the government has identified more than a dozen PSUs for stake sale, including National Fertilizers, MMTC, Hindustan Copper and ITDC.

It has approval of the Cabinet for sale of 5 per cent stake each in ONGC and Bharat Heavy Electricals (BHEL), and 10 per cent each in NALCO and NMDC.