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Rs 45000cr OFS for ONGC, CIL, NHPC cleared; unions protest

The Cabinet cleared a 5 percent stake sale in ONGC, 10 percent in Coal India and 11.36 percent in NHPC. The divestment will be taken up through the offers-for-sale (OFS) route.

The Cabinet Committee of Economic Affairs has approved stake sales in state-run ONGC ,  Coal India and NHPC .

The share sales are part of the government’s divestment program outlined in the Union Budget through which it hopes to raise about Rs 56,000 crore in fiscal year 2014-15.

The Cabinet cleared a 5 percent stake sale in ONGC, 10 percent in Coal India and 11.36 percent in NHPC. The divestment will be taken up through the offers-for-sale (OFS) route.

At current market valuations, this would raise Rs 19,000 crore (ONGC), Rs 23,600 crore (Coal India) and Rs 2817 crore (NHPC), amounting to a total of about Rs 45,417 crore.

Sources told CNBC-TV18 that the government is likely to keep 20 percent quota for retail investors (higher than the 10 percent mandated by Sebi), while the issue could carry a 5 percent discount, in each of the share sales.

Employees of the respective companies would have some share (0.25 percent for ONGC, 1 percent for Coal India and 0.56 percent for NHPC) of paid-up equity reserved for them.

However, an immediate roadblock to stake sale emerged after it was learnt that five unions of Coal India have expressed their opposition to the divestment in the company.

Sources told CNBC-TV18 that the unions have decided to go on a ‘work to rule’ protest between September 18 and 20 (under work-to-rule, employees report to work only to do specific, important jobs) and may decide to go a strike from September 21 if the government does not take back its decision.

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