The cabinet committee on economic affairs (CCEA) has approved a 10% stake sale in the country's biggest refiner and fuel retailer, Indian Oil Corporation, (IOC) and 5% in power producer NTPC. At current valuations, the government is expected to generate around Rs 14,000 crore from the proposed sale in the two PSUs.
The government had earlier divested 9.5% stake in NTPC in 2013 and raised Rs 11,470 crore. It currently holds a 74.96% stake in the firm and a 5% stake sale is expected to raise around Rs 5,600 crore. IOC’s 5% stake was picked up by two other state-run oil firms, ONGC and OIL in March 2014, yielding the government Rs 5,340 crore. The government currently holds a 68.57% stake in the firm and a 10% stake sale is expected to fetch it around Rs 8,100 crore.
The government has budgeted to raise Rs 41,000 crore through PSU stake sale in the current fiscal and another Rs 28,500 crore through strategic stake sales. The inclusion of these companies in the stake-sale programme will raise the chances of the government achieving the stiff target set for this year. This financial year the government has identified various other companies for stake sales, including State Trading Corp. of India, MMTC, Dredging Corp. of India, National Buildings Construction Corp, Rashtriya Chemicals and Fertilizers, SJVN , Neyveli Lignite Corp, Container Corporation of India , Shipping Corp. of India , MOIL and Hindustan Copper.