Last year decision on November 20, the Cabinet Committee on Economic Affairs approved a number of key decisions on divestment. Among them was the strategic disinvestment of the Centre’s entire stake in Bharat Petroleum, Shipping Corp, THDC India Ltd and NEEPCO Ltd, and most of its stake in Container Corp, relinquishing management control in these companies at the same time.
It also gave in-principle approval for the government to reduce its stake in certain state-owned companies to below 51 per cent but retain majority stake and thus management control.
To address the direction, India’s largest power producer NTPC Ltd, has said it will acquire entire central government stakes in two hydropower companies THDC India Ltd and North Eastern Electric Power Corp. Ltd (NEEPCO) for Rs 11,500 crore ($1.54 billion at current exchange rate), while NTPC will buy 100% of Neepco for Rs 4,000 crore, it will acquire a 74.4% stake in THDC for Rs 7,500 crore.
Neepco is a mini-ratna Category-I central public sector enterprise. It has an operational portfolio of 1,457 megawatt (MW) comprising hydropower generation capacity of 925 MW, gas-based generation capacity of 527 MW and solar generation capacity of 5 MW. Additionally, a 600 MW Kameng hydroelectric project is likely to be commissioned soon.
THDC is a joint venture of the central government and the government of Uttar Pradesh. It is a mini-ratna Category-I central public sector enterprise.
The firm has an operational portfolio of 1,513 MW comprising a hydropower generation portfolio of 1,400 MW and wind-power generation portfolio of 113 MW. Further, it has projects with aggregate capacity of 2,838 MW (1,468 MW hydro power, 50 MW solar power and 1,320 thermal power) under various stages of implementation.
In the current situation, the government hopes to garner Rs 65,000 crore via divestment proceeds during the current financial year ending 31 March, but it has managed to collect close to Rs 32,964 crore so far, with only a few days left before the year closes. If the current deal materialises before 31 March, the collection will bump up to Rs 44,464 crore, still short of the divestment target of Rs 65,000 crore.
Now, with the country in a coronavirus lockdown from 25 March until 14 April, it is unlikely that the government will meet its disinvestment target which had been revised downwards from Rs 1,05,000 crore for 2019-20.