The Centre plans to sell stake in hydropower producer SJVN and Power Finance Corporation to other public sector companies to net close to Rs 20,000 crore to help maintain its FY19 fiscal deficit target, sources told Bloomberg.
The government will sell its 63.8 percent stake in SJVN to NTPC, India’s largest thermal power producer, to garner close to Rs 8,000 crore, while Rural Electrification Corporation will acquire 65.6 percent stake in PFC.
These deals showcase the government's resolve to usher consolidation in the power space.
Amit Mantri, founder of 2Point2 Capital Advisors, told the wire that this a disinvestment proxy. “By selling stake in one state-run company to another, the government can claim to have monetised its stake. But this is only an optical reduction in fiscal deficit,” he added.
The Centre has raised Rs 9,200 crore from asset sales so far, which looks feeble against its FY19 target of Rs 80,000 crore.
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