“We have deposited most of the money in banks at card rates since the power ministry is still undecided on our demand. The ministry may have to first hold talks with the finance ministry and the department of public enterprises (DPE) before taking the final decision,” NHPC chairman and managing director SK Garg told FE. The company has deposited the money in banks with which it has ‘previous relations’, he added.

NHPC had sought the ministry’s clearance for inviting bids, since such an act is against the guidelines issued by DPE last year. The DPE guidelines prohibit any public enterprise to invite bids to deposit surplus money so as to enable banks to lend money for social sector schemes. Banks have to offer a higher interest rate to attract bulk deposits, which reduces its capability to charge low rates on credit.

“It should be clear that our proposal is not against the DPE guidelines, which does not restrict inviting bids from banks with which a firm has previous relations. We intend to deposit money only with such banks. Even now, we have done the same,” Garg said categorically.

NHPC had collected Rs 6,048 crore from the IPO, launched in August this year. Out of the total proceeds, government was given a sum of Rs 2,013 crore as consideration for stake sale and around Rs 4,000 crore was left with the company for funding projects that were to start after at least two years. Hence, the company constituted a committee of directors to suggest high-return options for investing this money.