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Home News Power Sector News Lukewarm response to NTPC and REC FPOs- centre puts SJVNL IPO on hold

Lukewarm response to NTPC and REC FPOs- centre puts SJVNL IPO on hold

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ShindeThe UPA government has put on hold the proposed initial public offer (IPO) of state-owned Satluj Jal Vidyut Nigam (SJVNL), after the lukewarm response to the follow-on offers (FPOs) of NTPC and Rural Electrification Corporation (REC). The IPO is now likely to hit the market in the next financial year against the earlier plan of rolling out the issue by end-March.

“The IPO (of SJVNL) has been delayed looking at what happened to REC and NTPC. The current market conditions don’t seem to be conductive for yet another public issue and the SJVNL IPO could now come in the first half of ’10-11,” SJVNL chairman and managing director HK Sharma said on the sidelines of a power conference. The Centre holds a 75% stake in SJVNL — a joint venture between the Centre and Himachal Pradesh —, while the remaining stake remains with the state government. The government is divesting 10% of its stake and expects to raise around Rs 1,200 crore.

Earlier, power minister Sushil Kumar Shinde had indicated that the disinvestment plan for SJVNL may get delayed to the next financial year. The finance ministry, which was keen to complete disinvestment process for SJVNL during the current fiscal, has also favoured stretching the issue to next year, as the issue would have come after the poor show of NTPC and REC issues, and just after another big-market offering of mining major NMDC. The FPOs of NTPC and REC were subscribed 1.2 and 3.12 times, respectively. Both the issues saw very poor interest from retail investors. The NTPC issue was rescued by state-owned financial institutions.

Meanwhile, power secretary HS Brahma on Wednesday said power utilities would import 48 million tonne (mt) of coal from Australia, Indonesia and South Africa during the next financial year (’10-11) to ensure regular fuel supply to the generating plants.

The companies have already imported 19 mt of coal from the targeted 28 mt during the current fiscal (’09-10). State-owned NTPC has also imported 9 mt of the targeted 12.5 mt during the current financial year (’09-10). The projected coal requirement by the end of the 11th Plan (’07-12) is expected to touch 700 mt and the demand from power companies is likely to be at 550 mt.

Source- Economic Times

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