The department of disinvestment (DoD) has started the preparation to conduct roadshows for 5% stake sale in state-owned Rural Electrification Corporation (REC) and Power Finance Corporation (PFC) each. REC and PFC lend to power companies.
Sources in the finance ministry and investment banking told FE that roadshows are planned in the second or third week of January in the US, UK, and Asia. The dates will be finalised after DoD officials and merchant bankers meeting. The government will take a final call on the timing and launch date of the stake sale based on the investors’ feedback from the roadshows.
“We are in the middle of planning the roadshows with various stakeholders. We haven’t finalised anything yet,” said a disinvestment department official.
A merchant banker with the stake sale in one of the state-owned power financiers said, “Road shows will happen soon and the timing of stake sale will be known only after taking the feedback from the road shows.” REC fell 2.38% and PFC fell 1.62% in early trade on BSE on Thursday following report of investment bankers planning road shows.
Axis Capital, SBI Capital Markets and Standard Chartered are managing the stake sale in PFC, while IL&FS-Avendus, Morgan Stanley and JM Financial are advising the government on REC stake sale. Both deals, if successful, could help the government raise Rs 3,000-3,300 crore.
Leaving aside REC and PFC, the government is also working on Coal India stake sale. However, planned stake sale in NHPC, Hindustan Aeronautics (HAL) and Rashtriya Ispat Nigam (RINL) have been put on hold for the current fiscal.
So far, the government has managed to raise Rs 1,719.54 crore from the 5.82% auction of Steel Authority of India (SAIL).