NTPC divestment only after coal block re-allocation clearance

NTPC Ltd. | Power Generation/Distribution | Power | BSE: 532555 | NSE: NTPC

31 Dec 2012 Evaluate

NTPC’s over Rs 12,000 crore divestment plan will see the light of the day only when clearances related to re-allocation of three coal blocks to the company are received by the Power Ministry. Out of the five coal blocks of NTPC which were taken back by the coal ministry, three of them Chatti Bariatu (2), Kerandari would be reallocated to the company. The blocks were taken back from NTPC by the Coal Ministry citing long delays by the power producer in developing them

Further, at a time when NTPC is struggling with fuel scarcity, the re-allocation will not only help boost the country's largest power producer's market valuation, but will also help government to fetch higher returns from the share sale.

Furthermore, the government, as part of the ambitious Rs 30,000 crore disinvestment programme for this fiscal, expects to garner more than Rs 12,000 crore from selling its 9.5 per cent stake in NTPC. NTPC became public with its initial public offering hitting the market in 2004. Thereafter in 2009, the government further reduced its stake in the company through Follow-on Public Offer (FPO).

NTPC is the largest power generating company in the country. It has also diversified into hydro power, coal mining, power equipment manufacturing, oil & gas exploration, power trading & distribution.