No proposal from PFC to sell REC to PGCIL | The Financial Express

No proposal from PFC to sell REC to PGCIL

The sources said there was “some confusion” after reports quoted power minister Raj Kumar Singh saying last week that the government was discussing such a plan.

No proposal from PFC to sell REC to PGCIL
The report of PFGS selling REC to PGCIL had contributed to a nearly 24% fall in the share price of PGCIL between September 21 and 26, before recovering to close at Rs 201 on the BSE on Monday.

The finance ministry has received no proposal from state-run Power Finance Corporation to sell its subsidiary lending firm REC to public sector transmission firm Power Grid Corporation of India (PGCIL), ministry sources told FE.

The sources said there was “some confusion” after reports quoted power minister Raj Kumar Singh saying last week that the government was discussing such a plan.

Also Read: REC-PFC to get the ball rolling soon on new scheme for power discoms

They, however, iterated that no such plan has been discussed with the finance ministry.

PFC had purchased the Centre’s 52.63% stake in REC for Rs 14,500 crore in March 2019, a move which was criticised by analysts as it was not seen as real disinvestment.

Also Read: PFC Q1 profit up marginally at Rs 4,580 crore

The report of PFGS selling REC to PGCIL had contributed to a nearly 24% fall in the share price of PGCIL between September 21 and 26, before recovering to close at Rs 201 on the BSE on Monday.

According to a recently unveiled policy, parent central PSUs desirous of disinvesting their subsidiaries would have to route such proposals through the administrative ministry to the department of investment and public asset management (Dipam), which will take the approval of a ministerial panel without having to secure the approval of the Cabinet. The policy specifically dissuades PSUs buying out other PSUs as the government is keen on exiting businesses gradually.

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