The government will likely sell stake in state-owned financiers Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) next week as part of its FY15 disinvestment plan, sources familiar with the matter told FE on conditions of anonymity. The government aims to raise over R3,000 crore from both the deals.
PFC stake sale was earlier planned for last week of January, however the Centre surprised the markets by launching Coal India (CIL) pushing the PFC sale to a later date. Corporate earnings also delayed the offer as both companies entered a blackout period ahead of quarterly earnings.
“If the timing is opportune, the government will launch both issues next week. There is no point delaying it,” said one person familiar with the matter.
PFC announced its third quarter (Oct-Dec) results on Wednesday. The company’s net profit grew 4.83% to R1,541.73 crore, mainly on account of increase in income from operations. The total income from operations rose to R6,434.65 crore against R5,540.52 crore in the same quarter last year.
REC will announce its quarterly results on Friday.
Sources said the government has completed all formalities for stake sale in PFC and REC – appointing merchant bankers, legal advisors, and conducting roadshows – that are required before launching the deal.
FE had also learnt that both the companies received positive feedback during international roadshows held in the US, UK and Asia.
The government has proposed to sell 4.94 crore shares in REC which can fetch R1,600 crore based on current market price. In the case of PFC, the government will sell 6.6 crore shares and may raise R1,850-1900 crore.
The Centre has lined-up ONGC (R15,000 crore), IOC (R8,000 crore), BHEL (R3,100 crore), MOIL (R500 crore), Nalco (R1,200 crore), and NMDC (R5,500 crore).
So far the government has managed to raise close to R25,000 crore after selling 10% stake in CIL and 5.82% stake in SAIL to public investors. The government has set a target to raise R43,425 crore through PSU stake sale this fiscal.