Wednesday, September 13 2006 12:42 Hrs (IST) - World Time -

New Delhi: The Prime Minister's Office has asked Power Ministry not to go ahead with the sale of five per cent government shares in Power Finance Corporation and come up with a fresh proposal for the company's maiden public offer.

"The PMO has told Power Ministry that the Government would not like to sell its shares in PFC but the company should be allowed to go ahead with its IPO plans," senior officials said.

The Power Ministry would now have to draft a fresh Cabinet note for the IPO to raise its equity base by 10 per cent, which amounts to 10.3 crore shares.

When contacted Power Ministry sources said the process has already been initiated for getting fresh cabinet approval.

Before the disinvestment process was halted due to opposition from supporting Left parties and DMK, the UPA government had decided to piggy ride on the PFC public offer and sell its five per cent shares in the market as part of disinvestment.

The company had even filed the Draft prospectus with the market regulator Securities and Exchange Board of India. The SEBI approval came on July 16 and it had three months to hit the market.