Power PSUs to go ahead with IPOs

The decision to put disinvestment on hold is unlikely to affect the existing plans of power public sector units to raise money from the stock market.

A top power ministry official confirmed that power PSUs would continue with their IPO plans. These involve issuing fresh equity up to 10 per cent of the enhanced paid-up capital of the companies.

"We will not be affected by the decision as our plans have got nothing to do with disinvestment," he told Business Standard.

Power Finance Corporation has already filed its red herring prospectus with Sebi. The plan is to sell 5 per cent as an offer for sale along with a 10 per cent fresh issue of equity through the public offer.

The power ministry has all along not favoured disinvestment. It instead wants that companies raise resources from the market for their expansion and utilise the issue proceeds to this end.

"The companies will need to access equity to enhance their net worth and leverage it to get more debt funding. Disinvestment does not allow the proceeds to remain with the company. We want them to meet their annual expenditure without depending on gross budgetary support from the government," power ministry officials had earlier said.

The initial public offer proposals of the National Hydroelectric Power Corporation and the Power Grid Corporation of India Ltd are expected to be sent to the Cabinet this month. After these, the ministry has plans for a public issue of the Rural Electrification Corporation.