IOC to pick up 26% stake in NPCIL Kota N-plant for Rs 900 crore

State-run oil marketing company Indian Oil today said it would invest about Rs 900 crore to pick up a 26 per cent stake in Nuclear Power Corporation’s 1,400-Mw atomic power project at Kota in Rajasthan.

“We would join Nuclear Power Corporation by picking up 26 per cent equity for Rs 900 crore in their 1,400-Mw Kota atomic plant,” Indian Oil Chairman and Managing Director B M Bansal told reporters here.

Nuclear Power Corporation is setting up a 1,400-Mw (2x700-Mw) nuke plant at Kota in Rajasthan, which is scheduled for completion by 2015-16.

“The joint venture agreement would be signed in a month,” Bansal added.

IOC would hold 26 per cent equity in the project, which is proposed to be financed by both partners in the debt equity ratio of 70:30. Meanwhile, the company is gearing up for its follow-on public offer in January, through which it expects to raise about Rs 20,000 crore.

The government plans to offload 10 per cent of its equity holding in Indian Oil through the FPO and an equal stake would be diluted by the PSU company. Following the stake sale, the government’s holding in IOC would reduce to 64.57 per cent from the existing 78.92 per cent. Indian Oil has hired six investment banks — Merrill Lynch, Citigroup, ICICI Securities, Morgan Stanley, SBI Capital and UBS — to manage the public offer. The mega offer is a part of the government’s Rs 40,000 crore disinvestment in this financial year.