The government may soon speed up the disinvestment drive by initiating mergers in the power sector, reported The Economic Times.

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According to the report, a source said that the government may soon start the process with a takeover by NTPC of the hydropower firm SJVN.

“Some blue-chip CPSEs (Central Public Sector Enterprises) have shown interest in acquiring smaller CPSEs where they feel synergies exist … also there are some CPSEs which can achieve efficiencies of scale if they combine their strengths,” the official was quoted as saying in the report.

In addition to this, the report also indicated towards another possible merger in the power sector, i.e. those between Power Finance Corporation (PFC) and REC Ltd. in which the government holds 65.64 percent and 57.99 percent stakes, respectively.

As per the report, sources said that the government is expecting to raise Rs 21,000 crore if these two deals are concluded successfully. The government raised Rs 10,028 crore in this fiscal year from disinvestment compared to its target of Rs 80,000 crore.

However, according to the report, the process may not be smooth as there are several hurdles in the front. “It may not be an easy route as the Himachal Pradesh government holds 26.85 percent in the firm (SJVN)," a senior official was quoted as saying in the report.