Coal Ministry ready to offload equity in Neyveli Lignite

Coal Ministry today said it is seeking approval for offloading 3.6% equity in the state-owned Neyveli Lignite Corporation (NLC) to meet the 10% public float guideline required for a Navratna company.

"We are open to further disinvestment of the company (NLC) and have written to Ministry of Finance in this regard... We are yet to hear from them on this front," Coal Minister Sriprakash Jaiswal told reporters here. He added that being a Navratna PSU, the company is required to have minimum 10% of its equity as public, while currently only 6.44% of its shares are traded on the bourses.

"We are willing to disinvest further 3.56% of its shares to meet the criteria set for the Navratna companies," Jaiswal said. NLC was accorded Navratna status in April this year, while it got listed on the stock exchanges in August, 2000. According to the data available with the National Stock
Exchange, the company's current market cap is Rs 17,171.36 crore on today's price of Rs 102.35 per share. 

The company currently has four opencast lignite mines, having a capacity of about 30.60 million tonnes per annum, while it can produce about 2,740 MW of power from four power plants. Moreover, power plants of about 7,050 MW capacity across the country are under construction for the company, which also intends to increase lignite mining capacity by an additional 13.5 mtpa in the near future.

The government has currently lined up two public sector majors -- ONGC and SAIL as its forthcoming disinvestments, while it raised over Rs 1,100 crore by selling its 5% equity in the Power Finance Corporation, which was also the first follow-on public offer of a PSU in the current fiscal.

It has also proposed an ambitious disinvestment target of Rs 95,000 crore from sale of shares in public sector companies over next three fiscals, including Rs 40,000 crore in the current fiscal. This is despite the government not being able to meet its target of Rs 40,000 crore in the last fiscal, when total disinvestment proceeds stood at Rs 22,762.96 crore.

In 2010-11, the government carried out disinvestment in SJVN Ltd (Rs 1062.74 crore), Engineers India Ltd (Rs 959.65 crore), Coal India (Rs 15,199.44 crore), PowerGrid (Rs 3721.17 crore), MOIL (Rs 1,237.51 crore) and SCI (Rs 582.45 crore). Presenting the budget for the current fiscal, Finance Minister Pranab Mukherjee had said that he intends to maintain the momentum on disinvestment in 2011-12 by raising Rs 40,000
crore.

Besides, the budget documents projected the disinvestment receipts at Rs 30,000 crore and Rs 25,000 crore in 2012-13 and 2013-14, respectively.