Mumbai: The government has re-invented the disinvestment process and has targeted raising Rs1,500 crore funds for the National Investment Fund through initial public offer (IPO) of three public sector power companies, despite opposition from its Left allies.

"The Government will be piggybacking on the IPOs of Rural Electrification Corporation (REC), Power Grid Corporation of India (PGCIL) and National Hydro-electric Power Corporation to raise Rs1,500 crore for the NIF, which has no funds currently", finance minister P Chidambaram said after a cabinet meeting.

Based on the estimated current book value of the three unlisted companies, he said, the government expects to raise a total of Rs2,400 crore, adding that the government hopes to garner funds for NIF from the IPO sales.

Post IPO, the government's share in REC will come down to 81.22 per cent, while that in PGCIL and NHPC will be reduced to 86.36 per cent each, Chidambaram said.

Chidambaram said external affairs minister Pranab Mukherjee had met the CPI-M leaders in January to appraise them of the need for finding resources to be channeled into the National Renewal Fund, which is meant for reviving the ailing public sector undertakings.

He had told them that "no money was flowing into the NIF", the earnings of which are intended for restructuring PSUs and for meeting social sector requirements.

"Without getting into disinvestment, if and when IPOs (of these PSUs) are issued we will piggyback a small portion to put it in NIF", Chidambaram added.