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The Cabinet is likely to take up tommorrow a proposal on five per cent disinvestment in Neyveli Lignite Corp (NLC), an issue that drew reservations of the Tamil Nadu government. The divestment could fetch the government Rs 500 crore.
The government currently holds 93.5 per cent share in NLC. The proposal is to divest the government stake by five per cent through the offer for sale (OFS) route.
The stock of NLC today closed up 2.1 per cent at Rs 59.75 on the BSE, while the benchmark Sensex gained 0.12 per cent to 19,245.70 points. At this price, the company has a market cap of Rs 10,024 crore.
The divestment proposal led to strong protest from the Dravida Munnetra Kazhagam in the first stint of the United Progressive Alliance, following which the government put the plan on the back-burner.
The proposal was listed on the agenda of the Cabinet in May, but put off after Tamil Nadu chief minister J Jayalalithaa wrote to Prime Minister Manmohan Singh, asking him to stop the disinvestment process as it would lead to labour unrest.
The disinvestment department had communicated to the Cabinet Committee on Economic Affairs that there was no option but to divest the stake in NLC to make it compliant with the minimum public shareholding norm. The Securities and Exchange Board of India has set a deadline of August 2013 for all listed central public sector units to have a minimum 10 per cent public shareholding.
Earlier this month, the minister of state in the Prime Minister’s Office, V Narayanasamy, had said there was nothing wrong in the move, which was meant only for the development of the company.
The government targets Rs 40,000 crore from direct disinvestment process, and Rs 15,814 crore from disinvestment of government stake in non-government companies etc.
Meanwhile, those in know of the development said the Cabinet is also likely to discuss a proposal to link Kurla and Bandra in Mumbai under the third phase of metro expansion project. The project is expected to cost over Rs 13,000 crore and the track will be 36.5 km long and fully underground.
Trial runs for a section of the first phase of Mumbai metro project was conducted recently. Cabinet is also likely to discuss a status note on 5% ethanol blending with petrol which was to be concluded by this month end.
Some officials said the petroleum ministry in its note has given a status on the number of tenders issued, the price at which those were issued, tenders finalized and sought a direction from the Cabinet as the deadline to complete the blending programme is likely to be missed.
