Seek board nod for disinvestment: govt to Neyveli Lignite

The coal ministry has asked Neyveli Lignite Corporation (NLC) to seek the board approval for offloading 3.6% equity to meet the guideline for 10% public float, required of a Navratna company.

The development comes on the heels of the finance ministry's request to the coal ministry for further disinvestment of NLC, which is under the latter's purview.

"The Ministry has written a letter to NLC asking it to seek the approval of its board for further disinvestment of the firm," an official in the Coal Ministry said.

Being a Navratna PSU, the company is required to have minimum 10% of its equity with public, while currently only 6.44% of its shares trade on the bourses.

The ministry had stated earlier that it was willing to disinvest further 3.56% of its shares to meet the criteria set for the Navratna companies.

NLC was accorded Navratna status in April this year, while it was listed on the stock exchanges in August, 2000.

The company has four opencast lignite mines, having a capacity of about 30.60 million tonnes per annum, while it produces about 2,740 MW of power from four power plants.

Besides, it is setting up power plants of about 7,050 MW capacity across the country, and intends to increase lignite mining capacity by 13.5 mtpa in the near future.

The government has set a disinvestment target of Rs 40,000 crore for the current fiscal. Yesterday, it made it clear that it is not going to revise the target despite volatile market conditions.

So far this fiscal, the government has been able to mop up only Rs 1,100 crore by offloading stake in the Power Finance Corporation (PFC).

Last fiscal, the government had raised Rs 22,763 crore from sale of equity in public enterprises, as against a target of Rs 40,000 crore. It offloaded equity in SJVN, Engineers India, Coal India, Power Grid and Shipping Corporation of India.