The Disinvestment department has initiated the process of appointing merchant bankers to manage the 5 per cent stake sale of PFC and REC, which could together fetch over Rs 3,000 crore to the exchequer.
The department has invited bids from bankers willing to advice government on the proposed stake sales through the Offer for Sale (OFS) route. The bids have to be submitted by September 22, according to a notice.
Government holds 72.80 per cent stake in Power Finance Corporation (PFC). It holds 65.64 per cent in Rural Electrification Corp (REC).
The Government is also considering to allot shares to PFC and REC employees at a 5 per cent discount to the issue price up to a maximum of 10 per cent of the OFS size. The employees will be eligible to apply for shares up to Rs two lakh only.
Shares of PFC closed at Rs 262.35, up 4.96 per cent on the BSE. At the current market price, a sale of 5 per cent stake or 6.6 crore shares would fetch the exchequer over Rs 1,700 crore.
Shares of REC closed at Rs 279, up 3.89 per cent on the BSE. At the current market price, sale of 5 per cent stake or 4.94 crore shares could fetch over Rs 1,300 crore to the exchequer.
The combined revenue to the exchequer from PFC and REC stake sale could be over Rs 3,000 crore.
The government estimates to collect Rs 43,425 crore through disinvestment in PSUs. It has already initiated process for stake sale in ONGC and NHPC. Besides, stake sale in Coal India, SAIL, RINL is also in the offing.
