Divestment process in NTPC, SJVN picks pace

Taking the divestment process in NTPC and Satluj Jal Vidyut Nigam forward, the government is scouting for lead managers to advise it on the timing of the two public issues.

The Divestment Department in the Finance Ministry has invited Request for Proposals for book running lead managers for the issues.

"The government will select and appoint up to four merchant bankers with requisite experience in public offerings, who together will form a team and be called Book Running Lead Managers," the department said.

The lead managers are expected to ensure best returns to the government through these two issues and would perform all other responsibilities connected with the public offerings.

While bidders interested for the NTPC issue should have handled domestic or international equity issues of the size of Rs 500 crore (Rs 5 billion) or more during the last three years, the requirement for SJVNL is Rs 100 crore (Rs 1 billion) or more.

Last month, the Cabinet Committee on Economic Affairs gave its nod for diluting 5 per cent government stake in NTPC through a follow-on offer and 10 per cent in the Satluj Jal Vidyut Nigam (SJVNL) through an initial public offer.

The government currently holds 89.50 per cent in NTPC, while it has 75 per cent stake in SJVNL.

The remaining 25 per cent stake in SJVN is held by the Himachal Pradesh government.

SJVN is engaged in the business planning, promoting, organising and execution of projects relating to generation, distribution, operation, maintenance and sale of power.

The interested parties have been asked to submit their proposal by December 3, 2009 in case of NTPC and by December 7 for SJVN.

Earlier this month, Disinvestment Secretary Sunil Mitra said the government expects to raise about Rs 8,100 crore (Rs 81 billion) from five per cent stake sale in NTPC, three times higher than what it had mopped up through stake sale in 2004.

He also said the stake sale in three PSUs -- NTPC, REC and SJVN-- had been cleared by the government and the three firms are expected to come out with public offers this fiscal.