North Block eyes share in power PSU public issues

Disinvestment may be on the backburner, but the finance ministry has not given up working on alternatives to mobilise resources from government-owned companies.

For starters, North Block wants a share of the proceeds from the upcoming 24 per cent initial public offer of the Rural Electrification Corporation (REC), aimed at mobilising Rs 1,000 crore.

Other power PSUs expected to hit the bourses shortly "with offer for sale of up to 10 per cent of their equity base" include National Hydroelectric Power Corporation, Power Finance Corporation and Power Grid Corporation.

REC is hoping to keep around Rs 800 crore from the IPO proceeds while the balance is likely to go to the finance ministry.

"To retain around Rs 200 cr will be the ministry's decision. We will be happy if we get the rest. In fact, we need a bigger IPO to enhance our networth and leverage it to raise more resources," a senior REC official told Business Standard.

Power secretary R V Shahi said he was not aware of any such move of the finance ministry.

The power ministry is working on a March 2007 deadline for listing the seven companies under its ambit, including North Eastern Electric Power Corporation, Satluj Jal Vidyut Nigam and Tehri Hydro Development Corporation. The combined size of these IPOs will be "substantial".

The power ministry wants the government-owned power companies to organise their own funding without depending on gross budgetary support from the government and IPOs are one way to go about it.