At current market prices, the divestment is expected to fetch about Rs.13,000 crore

The Cabinet Committee on Economic Affairs (CCEA) on Thursday approved sale of 9.5 per cent government stake in NTPC, a listed ‘Maharatna’ public sector undertaking (PSU) engaged in power generation. At current market prices, the equity divestment is expected to fetch about Rs.13,000 crore.

“The Cabinet Committee on Economic Affairs has approved disinvestment of 9.50 per cent government equity in NTPC, out of its holding of 84.50 per cent through an offer for sale of shares through stock exchanges as per SEBI Rules and Regulations,” an official statement said here.

Post-disinvestment, the Centre’s equity holding in the power major will come down to 75 per cent in adherence to the minimum public shareholding norms stipulated by market regulator Securities and Exchange Board of India (SEBI). As on March 31, 2012, the paid-up equity capital of NTPC, a PSU under the administrative control of the Ministry of Power, is Rs.8,245.46 crore. Of this, the Centre’s stake now stands at 84.5 per cent.

Hind Copper OFS today

Meanwhile, kicking off its maiden disinvestment for the current fiscal, the government has set Rs.155 a share as the floor price for a 4 per cent stake sale in Hindustan Copper Ltd. (HCL). Against a mop-up target of Rs.30,000 crore through disinvestment in 2012-13, the HCL equity sell-off is expected to fetch at least Rs.573.63 crore. “With reference to earlier announcement...regarding offer for sale of shares by promoter...Government of India has now informed the BSE that the floor price for the sale in terms of the OFS [offer for sale] guidelines shall be...Rs.155 per equity share of Hindustan Copper,” the state-run firm said in an exchange filing.

In its notice of OFS on Wednesday, HCL had said that it would not entertain any bid below the base price and that the sale would take place on the separate window of the stock exchanges — BSE and NSE. As per the OFS plan, the sale is slated to start on Friday at 9.15 a.m. and close the same day at 3.30 p.m.

Of the 4 per cent stake on sale amounting to 3.7 crore shares on offer, 25 per cent will be reserved for allocation to mutual funds and insurance companies.

“No single bidder other than mutual funds and insurance companies shall be allocated more than 25 per cent of the size of the sale,” HCL said. Alongside, the government has kept its option open for offloading an additional 5.59 per cent stake in the mining company in case the OFS receives a good response.

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