The Centre’s plan to sell its stake in SJVN to the National Thermal Power Corporation (NTPC) is stuck for clearance from the Himachal Pradesh state government. The state government holds a 26.85 per cent stake in SJVN, which owns and operates 2Gw of hydropower projects.
Senior executives in NTPC said the company’s proposal to acquire the Centre's 63.79 per cent stake in SJVN has been pending for approval for the past 1.5 years.
The sale is likely to fetch the Centre close to Rs 70 billion. If the acquisition goes through, it would be the third such transaction amongst central public sector undertakings. “There is merit in taking SJVN, as they have hydro projects. It will increase the company’s exposure to non-fossil fuel sources.
The deal includes management control by NTPC and if acquired, SJVN will function like other joint ventures of the company,” said an executive. The Cabinet Committee of Economic Affairs (CCEA) on Thursday had given an in-principle approval to the strategic sale of the government's 52.63 per cent holding in REC to PFC, along with the transfer of management control.
The move will help the Centre meet its disinvestment target of Rs 800 billion for FY19. Apart from the PFC-REC deal, another tranche of the successful Bharat 22 exchange-traded fund, and a few other deals, including the sale of Air India’s ground handling unit are also in the works. Sources also said the government is still considering NTPC taking over the Centre’s stake in SJVN.
“The Himachal Pradesh government, which owns a 26.78 per cent stake, has a few reservations. We're trying to understand their issues. So, nothing is certain,” a finance ministry official had said. In FY18, the Department of Investment and Public Asset Management raked in a record Rs 1 trillion, against a target of Rs 725 billion. A big portion of this was ONGC’s acquisition of Hindustan Petroleum, which garnered Rs 396 billion.