In a CPSE-to-CPSE deal, the Centre sold its entire holdings in THDC and Neepco to state-run power major NTPC for a consideration of Rs 11,500 crore.
“DIPAM completed two more strategic disinvestment transactions. The government’s 74.49% stake in THDC at a consideration of Rs 7500 crore and 100% stake in Neepco at Rs 4,000 crore has been disinvested in favour of NTPC,” department of investment and public asset management secretary (DIPAM) Tuhin Kanta Pandey tweeted.
Among other transactions, Rs 2,383 crore is expected from the sale of the Centre’s 67% stake in Kamarajar Port to Chennai Port. These deals and a few other small transactions would help the government garner as much as possible against the RE of Rs 65,000 crore for FY20.
So far in FY20, the disinvestment receipts stood at Rs 46,500 crore or 71.5% of the FY20 RE.
This is the third-year in a row, the Centre is garnering a significant amount of disinvestment revenues from CPSE-to-CPSE deals. It collected Rs 16,334 crore form sale of three companies including REC to PFC in FY19 and Rs 36,915 crore in FY18 from sale of the government’s entire stake in oil retailer HPCL to oil explorer ONGC.
NTPC’s purchase of the two state-owned power firms –THDC and NEEPCO– is in line with the government’s plan of integrating CPSEs in the same business to create bigger entities, which would be able to raise cheaper funds from market, reducing their dependance on the government for equity.