Government clears NTPC, IOC stake sale may mop up over Rs 13,000 crore

New Delhi: The cabinet on Wednesday approved plans to sell a 10 per cent stake in state-run oil refiner Indian Oil Corp and a 5 per cent stake in power producer NTPC, which may fetch the government over Rs 13,000 crore at current market price. "The Cabinet has approved 5 per cent disinvestment in NTPC and 10 per cent in Indian Oil Corporation (IOC)," a source said after the Cabinet meeting here.

According to BSE data, the market capitalisation of NTPC stood at Rs 1,11,313.77 crore while that of IOC was Rs 79,321.21 crore as of on May 13. The proposed share sale of 5 per cent in NTPC would fetch the government Rs 5,565 crore while that of 10 per cent in IOC would bring in Rs 7,932 crore. Thus, the stake sale in both companies would help the government mop up over Rs 13,000 crore.

The government holds 74.96 per cent in NTPC and 68.57 per cent in IOC, according to the BSE data. 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. NTPC was trading down 4.28 per cent at Rs 135.45 and IOC fell 1.79 per cent to Rs 326.85 at noon.