Odisha government is likely to shelve plans to divest 49% of its stake in thermal power producer Odisha Power Generation Corporation, said people aware of the development.
The state government owns 100% equity but it announced plans to sell only 49% stake in January.
“The sale process anyway had generated poor response since potential applicants were interested in acquiring a majority stake. With 49% on the block and the government holding 51%, they (bidders) will not have complete control over running of the company,” a senior executive with a big four consulting firm said.
The state government decided to sell equity to private investors two-and-a-half years after it acquired 49% back from US-based AES Corporation for Rs 1,000 crore.
In August 2000, Odisha government had blocked Adani Power from acquiring AES’ stake in the thermal power company by invoking its right of first refusal, according to media reports. Adani Power had in June of that year offered to acquire AES’ stake, but the Odisha government matched the offer.
Senior state government officials conveyed this decision to their advisor SBI Capital Markets, the people said. The state will run the process next year, and a formal communication will be sent out soon, they added.
SBI Capital Markets did not respond to ET’s request for comment until press time.
While selling distressed power companies, lenders use a standard benchmark of Rs 3 crore per MW of generating capacity to value the company. Using the same benchmark, this company is valued at ₹5,230 crore.