Govt mulls second tranche of 10 pc disinvestment in PFC

The Government is mulling divesting another 10 per cent of its stake in Power Finance Corporation through a follow-on public offer by the end of the current fiscal, sources in the know said.

The Government is mulling divesting another 10 per cent of its stake in Power Finance Corporation through a follow-on public offer by the end of the current fiscal, sources in the know said.

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Along with disinvestment, the company is also likely to raise up to 10 per cent fresh equity.

The proposal is at a preliminary stage of discussion between the Ministry of Finance and the Ministry of Power.

The government currently holds 89.78 per cent stake in the public sector company. It had divested 10 per cent stake by way of an initial public offer in 2007. After the proposed disinvestment it may go down to about 80 per cent.

The disinvestment in Power Finance Corporation (PFC) is part of the government's plan to sell 25 per cent stake in profit making PSUs in various tranches.

PFC's Board is meeting later this month and the issue may come up for discussion. There was, however, no confirmation.

PFC is a non-banking financial institution that provides loans for various power projects in generation, transmission, distribution sector as well as for Renovation & Modernisation (R&M) of existing power projects.

The government has divested its stake in various power PSUs over the last one year, starting with the initial public offering in NHPC in August 2009, followed by follow-on offers of NTPC and Rural Electrification Corp last fiscal (2009-10) and IPO of Satluj Jal Vidyut Nigam Ltd (SJVNL) in the current financial year.

The Ministry of Power is also gearing up for the follow-on public offer of the central transmission utility PowerGrid Corp, which can be expected by the end of the year.

The government is likely to divest 10 per cent stake in PowerGrid and 10 per cent fresh equity may be raised by the company.