State-run Indian Oil Corporation Ltd (IOC) said it will invest about Rs900 crore to pick up a 26% stake in Nuclear Power Corporation of India Ltd's (NPCIL) 1,400MW atomic power project at Kota, in Rajasthan.
NPCIL is setting up a 1,400MW (2x700MW) power plant, which is scheduled for completion by 2015-16. The joint venture agreement would be signed in a month.
IOC would hold 26% equity in the project, which is proposed to be financed by both partners in the debt-equity ratio of 70:30.
Meanwhile, the company is gearing up for its follow-on public offer (FPO) in January, through which it expects to raise about Rs20,000 crore.
The government plans to offload 10% of its equity holding in IOC through the FPO and an equal stake would be diluted by the company.
Following the stake sale, the government's holding in IOC would reduce to 64.57% from the existing 78.92%.
IOC has hired six investment banks-Merrill Lynch, Citigroup, ICICI Securities, Morgan Stanley, SBI Capital and UBS-to manage the public offer. The mega offer is a part of the government's Rs 40,000 crore disinvestment programme this fiscal.
On Friday, IOC ended 1.02% at Rs392.60 on the Bombay Stock Exchange, while the benchmark Sensex closed 1.73% down at 19,585.
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