New Delhi: The Union finance ministry on Monday said NTPC Ltd’s follow-on public offer has been rejected because under the present disinvestment policy government stake in a navratna company cannot be sold.
“The proposal involved disinvestment of 4.75% equity of NTPC out of government’s shareholding... Since the present policy does not envisage disinvestment by government in a navratna company, the ministry of finance did not agree to the proposal,” it said.
A navratna company enjoys greater autonomy and can take decisions on large projects without referring them to the government.
Last week, minister of state for power Jairam Ramesh had said that there was a proposal by NTPC to approach capital market through a follow-on public offer, but the finance ministry had rejected it.
The power ministry had approached the department of disinvestment in the finance ministry for approval of the follow-on offer that could have fetched the company nearly Rs6,000 crore to part finance its expansion programme.
After the follow-on offer, government shareholding in NTPC would have come down to 84.75% from the present level of 89.5%. NTPC had raised Rs5,386 crore in 2004 through an initial public offering by way of raising fresh capital and diluting government’s stake.