Plans to raise about R1,550 cr
The government on Tuesday fixed the floor price at Rs 315/share for auction of 5% stake in state-run Rural Electrification Corporation (REC) on Wednesday to raise about Rs 1,550 crore.
The share sale would commence on the Bombay Stock Exchange and National Stock Exchange at 9.15 am and close on the same day at 3.30 pm.
Retail investors would get 5% discount on the bid price.
The stocks of the company closed at Rs 320.60/share on the NSE, down 4.61% from Tuesday’s closing price.
With the REC share sale, the Narendra Modi government has made its determination clear to meet the ambitious disinvestment revenue target of Rs 69,500 crore this year, by frontloading disinvestments.
The stake sale proceeds are crucial for the government to bring down the fiscal deficit to 3.9% of GDP in FY16 from an estimated 4.1% last year, as uncertainties remain on tax collection growth.
The disinvestment target could not be met in the last five years under the UPA regime due to inordinate delays, often pushing share sales
towards the fag end of the year, leaving little time to execute them.
The Modi-led NDA government has prepared a strategy to sell shares in at least one company every month to achieve the disinvestment target this year.
Under a rolling plan, the department of disinvestment has prepared a list of state-run firms for share sales, including a 5-10% stake sale in
Oil and Natural Gas Corp,
Nalco, NMDC and Bharat Heavy Electricals Ltd, among others.