NEW DELHI: Power sector IPOs seem to be the latest buzz in government corridors following the trust vote. The power ministry is planning to list at least three central power companies over the next few months. While hydel major NHPC will be the first to hit the market sometime later this year, Damodar Valley Corporation (DVC) and North Eastern Electric Power Corporation (Neepco) would also come with public issues soon. The ministry is also planning to revive the follow-on public offer (FPO) of NTPC.
According to highly placed government sources, the ministry has favoured DVC’s proposal for a public offer which may be launched after the company floats its subsidiary. The company has already appointed consulting firm KPMG for exploring the various options through which the company can tap the capital market.
“The consulting firm will submit its report in the next two days, after which the company’s board will take a decision. Since DVC is a statutory company, the need was felt to set up a subsidiary company, which in turn could be listed,” a senior government official told ET.
The ministry has proposed that Delhi government may pick up 20% stake in the proposed subsidiary as DVC is set to become a major power supplier to the state. DVC is targeting a generation capacity of 11,000 mw by 2012, and Delhi is to get almost 20% or over 2,000 mw.
The government has also started the process of coming out with a public offer of Neepco. The government will first upgrade the company from the list of Schedule-B to Schedule-A and then come with a public offer. “The ministry of heavy industries has agreed to facilitate the process of its upgradation that is essential for the public offering. A proposal in this regard is already with the Department of Public Enterprises (DPE),” the official said. Neepco proposes to raise around Rs 400 crore to fund its projects.
Besides, the FPO of NTPC could also be revived. The finance ministry had earlier turned down the PSU’s proposal to raise nearly Rs 6,000 crore through a follow-on public offering as the government’s disinvestment policy does not favour dilution of equity in navratna companies. As per government estimates, over Rs 10 lakh crore of investment is required in the power sector during the 11th Plan.
According to highly placed government sources, the ministry has favoured DVC’s proposal for a public offer which may be launched after the company floats its subsidiary. The company has already appointed consulting firm KPMG for exploring the various options through which the company can tap the capital market.
“The consulting firm will submit its report in the next two days, after which the company’s board will take a decision. Since DVC is a statutory company, the need was felt to set up a subsidiary company, which in turn could be listed,” a senior government official told ET.
The ministry has proposed that Delhi government may pick up 20% stake in the proposed subsidiary as DVC is set to become a major power supplier to the state. DVC is targeting a generation capacity of 11,000 mw by 2012, and Delhi is to get almost 20% or over 2,000 mw.
The government has also started the process of coming out with a public offer of Neepco. The government will first upgrade the company from the list of Schedule-B to Schedule-A and then come with a public offer. “The ministry of heavy industries has agreed to facilitate the process of its upgradation that is essential for the public offering. A proposal in this regard is already with the Department of Public Enterprises (DPE),” the official said. Neepco proposes to raise around Rs 400 crore to fund its projects.
Besides, the FPO of NTPC could also be revived. The finance ministry had earlier turned down the PSU’s proposal to raise nearly Rs 6,000 crore through a follow-on public offering as the government’s disinvestment policy does not favour dilution of equity in navratna companies. As per government estimates, over Rs 10 lakh crore of investment is required in the power sector during the 11th Plan.
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