NEW DELHI: India’s largest power generating company National thermal Power Corporation (NTPC) on Thursday said that the government may sell up
to 5% of its equity in the company before March. The move is part of the United Progressive Alliance (UPA) government’s disinvestment programme under which it intends to sell minority stake in select public sector undertakings.

“The government is looking to dilute between 4.7 to 5% of its equity in NTPC. We are awaiting for a formal approval in this regard,” NTPC chairman R S Sharma told reporters on the sidelines of a power conference. Rural Electrification Corporation (REC), the nodal company for funding power projects in rural areas, is also believed to be on the government’s radar for divestment.

NTPC, with an installed capacity of over 30,000 MW is expanding its capacity by 22,430 MW by the end of the 11th plan period (March 2012) to become a 50,000 MW company. Its profit after tax for 2008-09 was Rs 8,201 crore compared to Rs.7,415 crore in 2007-08, an increase of 10.61%.

The current divestment proposal for NTPC follows a similar proposal in 2008. That time the company proposed disinvest 4.75% of government equity in the company. This was rejected by the finance ministry during the previous UPA regime as the common minimum program (CMP) did not permit disinvestment in profit-making navratna companies.

In another development, power secretary H S Brahma told reporters that NTPC would float a bulk tender worth Rs 21,000 crore for sourcing super- critical power equipment generating 7,260 mega watt electricity. The government has already approved a bulk order for power equipment, envisaging an investment of Rs 40,000 crore, for the upcoming thermal power plants of NTPC and Damodar Valley Corp, a move that will help overcome power shortage in the country, which includes Rs 21,000 crore main plant equipment.