The Cabinet Committee on Economic Affairs is likely to take a call soon on offloading 5 per cent stake in Neyveli Lignite (NLC).

This will be the third attempt to offload Government’s stake in the company in the last six years.

Such a move will meet twin objective, that is, disinvestment and meeting the minimum public shareholding norms.

The Securities and Exchange Board of India (SEBI) has asked all the Public Sector Undertakings to have minimum public shareholding of 10 per cent by August next year. The Government currently owns 93.5 per cent in NLC.

The Coal Minister, Sri Prakash Jaiswal, said, “6.5 per cent (Government stake in Neyveli Lignite) is already divested, 3.5 per cent (stake dilution) was remaining.

But, after instructions from the Finance Ministry, now it has been decided that dilution will be of 5 per cent.”

However, this will not be easy, as one of the allies, Dravida Munnetra Kazhagam (DMK), has already said that it will talk to the Prime Minister. Strong opposition, earlier, forced the Government to cancel the stake sale twice, first in 2006 and then in 2009.

However, the Government has already flagged NLC as one of the 15 possible candidates for disinvestment during the current financial year.

These companies were mentioned during road show for Qualified Foreign Investors held in the Gulf.

The Government aims to mobilise Rs 30,000 crore through disinvestment this year.

Meanwhile, the Coal Ministry has ruled out further offloading in Coal India.

The Government offloaded 10 per cent in this company in 2010-11 which fetched over Rs 15,000 crore.

(This article was published on August 27, 2012)
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