Govt clears stake sale in Coal India, ONGC, NHPC; may garner over $7.2B

By PTI
10 September, 2014

Government today cleared 5 per cent disinvestment in oil major ONGC, which may fetch the exchequer about Rs 18,000 crore.

According to sources, the Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Narendra Modi, has cleared the ONGC stake sale proposal.

Earlier this week, the disinvestment department had selected 5 merchant bankers — Citigroup and HSBC Securities, UBS Securities, ICICI Securities and Kotak Mahindra Capital for managing the stake sale.

The ONGC scrip closed at Rs 445.30, down 0.79 per cent, on the BSE. At the current market price, the 5 per cent stake sale or over 42 crore shares, would fetch over Rs 18,000 crore to the exchequer.

The merchant bankers will advise the government on the timing and modalities of Offer For Sale (OFS) and ensure best returns to the government, which holds 68.94 per cent stake in ONGC.

The Cabinet nod for the ONGC stake sale comes as the Petroleum Ministry too has consented to the stake sale.

The government had last sold 5 per cent stake in ONGC in 2012 for Rs 14,000 crore.

In the current fiscal the government plans to mop up Rs 43,425 crore from selling stake in various state-owned firms.

The government on Wednesday gave a go-ahead to the much-awaited 10 per cent stake sale in Coal India Ltd, which could fetch over Rs 23,000 crore to the exchequer.

Sources said the Cabinet Committee on Economic Affairs (CCEA) has approved the disinvestment department’s proposal to offload 10 per cent stake through Offer For Sale (OFS) route.

At Wednesday’s closing share price of Rs 373.85, a sale of 10 per cent stake or 63.16 crore shares in CIL would fetch the government more than Rs 23,000 crore.

This will make up for more than half of the total disinvestment target for the current fiscal, 2014-15, during which the government plans to mop up Rs 43,425 crore from selling stake in PSUs.

A planned stake sale in CIL in 2013-14 had to be deferred after stiff opposition from the trade unions. The coal major had to make up for that by paying about Rs 19,000 crore as dividend to the exchequer.

The government, which holds a 89.65 per cent stake in CIL, initially sought to divest a 10 per cent stake but lowered it to 5 per cent on account of opposition from the unions.

Government today cleared 11.36 per cent stake sale in NHPC, that could fetch over Rs 2,800 crore to the exchequer.

The Cabinet Committee on Economic Affairs (CCEA) has cleared sale of government’s 11.36 per cent in NHPC through an Offer For Sale (OFS), sources said.

At the current market price of Rs 22.40 a piece, sale of 11.36 per cent or 125.76 crore shares would fetch over Rs 2,800 crore to the exchequer.

Government holds 85.96 per cent stake in NHPC. The stake sale would help the company comply with the minimum 25 per cent public shareholding norm of market regulator Sebi.

The disinvestment department has already selected three merchant bankers — Edelweiss Financial, IDFC Capital and HSBC Securities– for managing the NHPC stake sale.

In the current fiscal, the government plans to mop up Rs 43,425 crore from selling its stakes in PSUs.


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Govt clears stake sale in Coal India, ONGC, NHPC; may garner over $7.2B

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