State-run Power Finance Corp has proposed disinvestment in the company by way of up to 20 per cent public issue, Parliament was informed today.
"The Board of Power Finance Corp has approved a proposal for a fresh issue of equity shares along with disinvestment, not exceeding in aggregate 20 per cent of existing paid up share capital of the company, subject to approvals," Minister of State for Power Bharatsinh Solanki told the Lok Sabha in a written reply.
The company is likely to raise fresh equity to the tune of 10 per cent and the government may disinvest 10 per cent of its 89.78 per cent stake in the public sector company.
Going by the current market capitalisation of the company, which stands at about Rs 38,909 crore, PFC may raise over Rs 7,700 crore.
The government 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.
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.