Cabinet clears stake sale in Coal India, ONGC, NHPC

The Union government on Wednesday cleared disinvestment proposals of state-owned Coal India, ONGC and NHPC that together will garner close to Rs 44,000 crore.

This is more than the budgetary target of Rs 43,425 crore mop up from stake sale in public sector companies.

The Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Narendra Modi, has cleared these stake sale proposals, sources attending the meeting said.

The stake sale in all the three companies will be done through Offer for Sale route.

The government will divest 10 per cent of its stake in Coal India that is expected to fetch Rs 23,000 crore to the exchequer. It plans to sell 5 per cent in oil major ONGC, which may garner Rs 18,000 crore and a 11.36 per cent stake sale in NHPC is expected to net Rs 2,800 crore to the exchequer at current prices.

A planned stake sale in Coal India in 2013-14 had to be deferred after stiff opposition from trade unions. The coal major had to make up for that by paying about Rs 19,000 crore as dividend to the exchequer. The government holds 89.65 per cent stake in Coal India.

The ONGC stake sale comes after the Petroleum Ministry consented to it. The government holds 68.94 per cent stake in the ONGC. It had last sold 5 per cent stake in ONGC in 2012 for Rs 14,000 crore.

Earlier this week, the disinvestment department had selected five merchant bankers – Citigroup and HSBC Securities, UBS Securities, ICICI Securities and Kotak Mahindra Capital – for managing the ONGC stake sale.

The government holds 85.96 per cent stake in NHPC. The stake sale in NHPC is necessitated to help the company comply with the minimum 25 per cent public shareholding norm of market regulator Sebi.

The disinvestment department has already selected three merchant bankers - Edelweiss Financial, IDFC Capital and HSBC Securities - for managing the NHPC stake sale.