TN CM Vijay urges Centre to halt NLC India stake sale via OFS
Synopsis
Tamil Nadu CM C. Joseph Vijay has formally asked PM Modi to pull back a plan to sell up to 3 per cent of NLC India's equity via OFS — arguing that the Neyveli-based PSU, built on State land with State support, cannot be treated as just another listed company. The pushback signals a sharpening Centre-State fault line over who controls strategically embedded public enterprises.
Key Takeaways
Joseph Vijay wrote to PM Narendra Modi on 25 June opposing the Centre's plan to divest stake in NLC India Ltd .
The proposed disinvestment involves an OFS of up to 3 per cent — a 2 per cent base offer plus a 1 per cent green-shoe option.
Vijay called NLC India a 'strategic national asset' with its headquarters and major lignite mines — Mine I, Mine IA, Mine II — located at Neyveli, Tamil Nadu .
The CM argued the State has a 'legitimate and enduring stake' in the PSU, built over decades with State land, infrastructure, and public cooperation.
Vijay cautioned that even limited equity dilution sets an 'undesirable precedent' for public ownership of strategically significant enterprises.
The Centre is yet to respond publicly to the State government's objections.
Tamil Nadu Chief Minister C. Joseph Vijay has written to Prime Minister Narendra Modi, calling on the Union government to withdraw its proposal to divest a further stake in Neyveli Lignite Corporation (NLC) India Ltd, describing the public sector undertaking as a 'strategic national asset' with deep roots in the State. The letter, dated 25 June, comes in response to the Centre's plan to offload up to 3 per cent of NLC India's paid-up equity through an Offer for Sale (OFS).
What the Centre Has Proposed
The disinvestment plan involves a base offer of 2 per cent of NLC India's equity, with an additional 1 per cent green-shoe option. While the quantum may appear limited, critics argue that even a marginal dilution of the government's shareholding in a strategically significant PSU sets a concerning precedent for public ownership of critical infrastructure.
Tamil Nadu's Objections
Chief Minister Vijay stated that the Tamil Nadu government is 'firmly opposed' to any further reduction of the Centre's stake in NLC India. He underscored that the corporation is headquartered at Neyveli, where its principal lignite mines — Mine I, Mine IA, and Mine II — along with pit-head thermal power stations, are situated. The enterprise, he noted, was built over decades using land acquired through the State government, with extensive administrative support, infrastructure development, rehabilitation measures, and the sustained cooperation of Tamil Nadu's people.
Vijay argued that the State therefore holds a 'legitimate and enduring stake' in the PSU's future, and that NLC India's role extends well beyond that of a listed company — encompassing energy security, mineral development, and critical infrastructure.
Broader Implications Flagged
The Chief Minister cautioned that the proposed disinvestment carries implications that go beyond financial calculus. He warned that diluting government ownership — even marginally — in enterprises built with host-State support could undermine the principle of effective public control over strategically significant assets. Vijay stressed that the matter bears directly on the long-term interests of Tamil Nadu's people and the country's energy security architecture.
Notably, this intervention reflects a broader pattern of State governments pushing back against the Centre's disinvestment agenda, particularly when PSUs have a significant local footprint. NLC India's operations are almost entirely concentrated in Tamil Nadu, making the State's stake in its ownership trajectory especially pronounced.
What the Chief Minister Has Asked For
Vijay urged Prime Minister Modi to reconsider the proposed OFS and expressed hope that the Centre would give 'due weight' to the State government's concerns and 'principled objections'. He reiterated that public sector enterprises established and expanded with sustained support from host States should remain under effective government ownership and control.
The Centre is yet to respond publicly to the letter. How the Union government weighs Tamil Nadu's objections against its broader disinvestment targets will determine whether the NLC India OFS proceeds as planned.
Point of View
The host government's objections carry democratic weight that goes beyond sentiment. The 3 per cent OFS may seem modest, but the principle at stake is not: who owns the future of enterprises that States helped build? With the Centre under fiscal pressure and disinvestment targets routinely undershot, the NLC India case will test whether the Union is willing to negotiate the terms of PSU ownership with States — or simply proceed unilaterally.
NationPress
25 Jun 2026
Frequently Asked Questions
Why is Tamil Nadu opposing the NLC India stake sale?
Tamil Nadu CM C. Joseph Vijay argues that NLC India is a 'strategic national asset' built on State land with State support, and that diluting the Centre's shareholding sets a damaging precedent for public ownership of critical infrastructure. The State contends it has a legitimate stake in the PSU's future given its deep operational ties to Tamil Nadu.
What exactly is the Centre's disinvestment plan for NLC India?
The Union government has proposed an Offer for Sale (OFS) of up to 3 per cent of NLC India's paid-up equity — comprising a base offer of 2 per cent and a 1 per cent green-shoe option. The move is part of the Centre's broader disinvestment agenda.
Where are NLC India's key operations located?
NLC India is headquartered at Neyveli in Tamil Nadu, where its three major lignite mines — Mine I, Mine IA, and Mine II — and pit-head thermal power stations are located. The corporation's operations are almost entirely concentrated within the State.
What has CM Vijay specifically asked PM Modi to do?
Vijay has urged PM Modi to reconsider and withdraw the proposed OFS, asking the Centre to give 'due weight' to Tamil Nadu's concerns. He has argued that PSUs built with host-State support should remain under effective government ownership and control.
Has the Centre responded to Tamil Nadu's objections?
As of 25 June, the Centre has not publicly responded to Chief Minister Vijay's letter. Whether the Union government proceeds with the NLC India OFS or pauses to address the State's objections remains to be seen.
