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Centre going ahead with NTPC disinvestment

By Our Special Correspondent

NEW DELHI, JULY 30. Despite opposition from the Left parties, the Union Government is going ahead with the 5.25 per cent disinvestment of its equity in National Thermal Power Corporation (NTPC). The draft prospectus for the disinvestment is expected to be filed with the market regulator, Securities and Exchange Board of India (SEBI), on Tuesday.

The Finance Minister, P. Chidambaram, announced disinvestment of Government stake in NTPC during his budget speech earlier this month. Taking note of NTPC's decision to go in for a public issue, Mr. Chidambaram said this would marginally dilute Government's holding in the company. Therefore, to extract value for its holding and to compensate for the effect of dilution, he announced the decision to disinvest about 5 per cent of its holding in the company.

However, this decision came in for opposition from the Left parties who clubbed the NTPC disinvestment along with increases in foreign direct investment (FDI) limit in telecom, insurance and civil aviation as points which they would oppose.

NTPC, which had already filed its prospectus with SEBI for the public issue, is now expected to file a combined prospectus for selling 5.25 per cent Government stake and an Initial Public Offer (IPO) for an equal amount. The issues are likely to hit the market mid-September.

In his budget, Mr. Chidambaram has taken credit for Rs. 4,000 crores through disinvestment. Along with NTPC, sale of residual holdings in Maruti and Balco are also under consideration.

Meanwhile, NTPC today paid a dividend of Rs. 1,082.32 crores to the Government, based on its profits of Rs. 5,260.80 crores during 2003-04. This is the tenth consecutive year that NTPC has paid dividend to the Government.

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