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THDC, NEEPCO disinvestment concludes; NTPC gets 2 subsidiaries

NTPC has purchased the govt’s 74.49% equity stake in THDC India and 100% stake in NEEPCO as part of the Centre’s disinvestment programme

THDC, NEEPCO disinvestment concludes; NTPC gets 2 subsidiaries
THDC, NEEPCO disinvestment concludes; NTPC gets 2 subsidiaries

New Delhi: State-run NTPC Limited has purchased the government’s 74.49 percent equity stake in THDC India and 100 percent stake in NEEPCO on Thursday as part of the Centre’s disinvestment programme, the PSU said in a tweet. The THDC, NEEPCO disinvestment comes barely days ahead of the end of the financial year 2019-20 and is expected to chip in Rs 11,500 crore to the state coffers, as was reported by PSU Watch on March 25. “Post acquisition, these companies will become subsidiaries of NTPC,” the power PSU said in a tweet.

THDC, NEEPCO disinvestment will push total yield to Rs 47,037 cr

The money raised by DIPAM (Department of Investment and Public Asset Management) via disinvestment, including OFS (Offer for Sale), equity traded funds and buybacks, stood at Rs 35,537 crore as on March 12. The funds raised from THDC, NEEPCO disinvestment is likely to push the total to Rs 47,037 cr. However, the total yield from disinvestment is expected to fall short of the targeted Rs 65,000 crore by around Rs 15,000 crore. PSU Watch had reported that the total disinvestment yield for financial year 2019-20 is likely to be around Rs 50,300 crore. Another deal which is expected to be concluded before March 31 is the sale of Kamarajar Port Ltd. to Chennai Port Trust. This is likely to fetch the government around Rs 2,400 crore.

FY2019-20 disinvestment target: Govt puts off OFS

Even as a few share buybacks from public sector undertakings are in the pipeline, the multitude of OFS that the government had initially planned will not be taken up because of the volatile situation in the stock markets owing to the Coronavirus pandemic and the subsequent shutdown and the crash in oil price. The government was relying on a number of minority stake sales to meets its FY2019-20 disinvestment target.

The backdrop

The Centre had revised its FY2019-20 disinvestment target from Rs 1.05 lakh crore to Rs 65,000 crore in February this year, as two major deals were pushed to the next fiscal — Bharat Petroleum Corporation Limited (BPCL) and Air India. For FY2020-21, the government has set a target of Rs 2.1 lakh crore, including Rs 90,000 crore which is expected to come from the sale of Center’s stake in banks and financial institutions. The deadlines for Air India have already been postponed and rumour has it that BPCL sale is also set to be delayed in the backdrop of the worldwide Coronavirus outbreak.