The report said that the proposals will be taken up by the new ministerial committee that will oversee mergers and stake sales.
File photo of NTPC plant.
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India’s public sector units (PSUs) may see a major round of restructuring as the new Narendra Modi government takes guard. According to an Economic Times report, the government has started work on bifurcation of GAIL (India) into two divisions — marketing and transportation units – of which one could be sold. Also, a three-way merger of power generation companies NTPC, SJVN and NHPC is on the cards.
According to the report, a finance ministry official aware of the developments said state-owned refiner Indian Oil Corp. Ltd (IOC) may be a potential buyer of the GAIL unit. The government currently holds 52.64% in GAIL.
“In the past, the petroleum ministry had some reservations… we expect to iron out these issues this time,” the official was quoted as saying. The government could raise about Rs 30,000 crore from the stake sale in such an exercise, the report added.
The report also said that the government is considering merger of NTPC, NHPC and SJVN. NTPC is the country’s largest power generator and may eventually become the holding company. The official quoted above added that one option can also be NHPC buying out government’s stake in SJVN and, at a later stage, become holding company for both utilities. The government’s 61.93% in SJVN is valued at about Rs 6,000 crore at the current market price, while it holds 73.33% in NHPC.
The report said that the proposals will be taken up by the new ministerial committee that will oversee mergers and stake sales.
The government has set a disinvestment target of Rs 90,000 crore for the current financial year. It raised Rs 84,972.16 crore in 2018-19 against a divestment target of Rs 80,000 crore.
Shares of GAIL (India) Ltd tumbled 10% on Thursday, while those of NTPC and NHPC were trading nearly flat. SJVN shares gained as much as 3% in intraday trade on Thursday.
Source: News18