'PowerMin did not favour NHPC disinvestment via OFS'

The government shelved the OFS route to sell 11.36% stake in NHPC after the Power Ministry said uncertain markets and a vacuum at helm in the hydro power producer were not conducive, officials said.

Earlier in August, the Cabinet had deferred a proposal for divesting government stake through the the offer for sale (OFS) route.

The NHPC board has unanimously approved the buyback of up to 10% of fully paid-up equity shares of Rs 10 each for an aggregate amount of nearly Rs 2,400 crore.

The government has set a target of raising Rs 40,000 crore through disinvestment in (2013-14).

The official said the Power Ministry had written to the Finance Ministry stating that conditions were conducive to disinvestment.

"It may be noted that the market price of share depends upon the economic conditions in the country, market conditions, investors sentiments and other variables, NHPC has depreciated over 30% from its listing price," the Power Ministry has said in a letter to the Finance Ministry

It also said the post of Chairman and Managing Director NHPC is lying vacant since January, 2011 and filling up this post is likely to take time.

"In addition, the incumbent to the post of Director (Finance), NHPC, is also continuing on the basis of orders issued by the Delhi High Court. The matter is still sub judice. A decision regarding filling up the post of Director (Finance) by a regular incumbent is also likely to take time," it said.

"As a result of these uncertainties regarding the incumbents of the aforesaid two posts which are very crucial for processing the matter of disinvestment, the present time does not appear conducive for such disinvestment in NHPC," the letter added.

It is requested that the disinvestment of government shares in NHPC may be deferred, it said.