By selling five per cent stake in Power Grid Corp, the Union government plans to speed up the process of raising up to Rs 3,000 crore even as the State-run company looks to raise fresh equity to fund its expansion activities. The government, which currently holds 69.42 per cent stake in Power Grid, plans to sell 5 per cent stake in the company, which could fetch the exchequer over Rs 3,000 crore.
The government-owned Power Grid is engaged in power transmission business with the responsibility for planning, coordination, supervision and control over inter-state transmission system and operation of national and regional power grids.
The government has targeted Rs 40,000 crore by way of PSU stake sales this fiscal year and has raised only about Rs 1,000 crore so far. The company's Board of Directors had in this month approved stake sale to the tune of 15 per cent of existing paid up share capital comprising fresh issue of 69,44,58,802 equity shares. The proposal is subject to necessary regulatory approvals. The mode of disinvestment may be offer for sale (OFS).
The offer-for-sale method was introduced by market regulator SEBI early this year and allows companies to sell shares in a simplified process on the stock market platform through a one- day bidding process.