Corporate Jan 21, 2013
New Delhi: In a breather to NTPC, government today said it will re-allocate its three forfeited coal blocks by tomorrow after Law Ministry's approval, a step that will bolster the state-run firm's valuation prior to its share sale.
The three coal blocks-Chatti-Bariatu, Kerandari and Chatti-Bariatu (South)-would be re-allocated to NTPC by tomorrow after getting the Law Ministry's approval. "The whole issue of coal blocks that have to be re-allocated to NTPC will be done by tomorrow ... blocks will be re-allocated to NTPC post Ministry of Law's opinion on that matter," Power Minister Jyotiraditya Scindia told reporters here.
Asked when the Law Ministry's approval is expected, Scindia said: "Today or tomorrow." Coal blocks allotted to NTPC were taken back by the government in 2011 due to delay in developing these mines. Meanwhile, Coal Minister Sriprakash Jaiswal said: "NTPC coal block re-allocation issue is being looked into. We hope that it would be resolved soon."
Both Jaiwsal and Scindia today met Finance Minister P Chidambaram to discuss the matter of coal block re-allocation. This move to give back the mines to NTPC will boost company's valuation at the time of its share sale.
The government plans to sell stake in NTPC by the end of this fiscal. It would sell 9.5 percent stake in NTPC through Offer for Sale or auction mechanism. It expects to raise Rs 12,000 crore through the offer. The government holds 84.5 percent stake in the NTPC. Post-disinvestment, its stake would come down to 75 percent. The government has proposed to raise Rs 30,000 crore by way of disinvestment in 2012-13. So far, it has been able to realise Rs 6,900 crore.
NTPC shares today closed at Rs 161.75, down 1.46 percent. As far as allotment of more coal blocks is concerned, Scindia said NTPC would participate in the auction. On additional block allocation to NTPC for setting 8,460 MW capacity which required about 42 MTPA (million tonnes per annum) of coal, Scindia said the Coal Ministry is putting out a tender for 17 blocks and NTPC will be participating in that.
"...we should be able to garner the requisite capacity of coal that would be required for 8,450 MW by mid-February or so," Scindia added.
More From R Jagannathan.