Govt to push big-ticket sell-offs in last quarter

Decision on Coal India Ltd,Hindustan Zinc and Balco stake sales to be finalised in few weeks.

Written by Surabhi | New Delhi | Published: December 11, 2013 1:47 am

With more than half the fiscal over,the government’s disinvestment drive seems to be finally gathering steam and stake sale plans in Coal India,Hindustan Zinc and Balco are likely to be finalised over the next few weeks as the finance ministry is keen to push through with some big ticket issues by early 2014 to get the much-needed revenue.

“The data on the current account deficit has been encouraging. Markets seem to be stable now and investors are also seem positive. So the time is right to move ahead with some of the bigger stake sales,” said a senior government official.

While a call on how to proceed with the 5 per cent disinvestment in state-owned Coal India Ltd (CIL) will be taken by the month end,the official said that stake sales in Hindustan Zinc Limited (HZL) and Balco will also be taken up soon.

Timelines for disinvestment in Bharat Heavy Electricals Ltd (BHEL),Engineers India Ltd (EIL),Hindustan Aeronautics Ltd (HAL) and Indian Oil Corporation (IOC) will also be finalised soon,the official said,adding that these would be brought to the market in the fourth quarter of the fiscal.

The long-pending exchange traded funds for PSUs could also be launched later this financial year.

“We are also finalising the Cabinet note for HZL and Balco. It will be done through the offer for sale route,” he added.

At present,the Centre holds 29.5 per cent stake in HZL and 49 per cent stake in Balco,after it sold off majority stake in the two firms to Vedanta Resources during 2001-2003.

Disinvestment in state-owned firms is back in the spotlight as tax collections are laggard and the subsidy bill is likely to be much more than the Budget target. Proceeds from stake sales are expected to help keep the fiscal deficit at the targeted 4.8 per cent of the GDP in 2013-14.

“We are not ruling out achieving the Rs 40,000 crore target from stake sales but we are hopeful of earning at least Rs 20,000 crore to Rs 25,000 crore in the current scenario,” said the official.

Additionally,stake sales in HZL and Balco could fetch at least Rs 16,000 crore.

The Union Budget 2013-14 had estimated Rs 54,000 crore from disinvestment proceeds (including HZL and Balco).

A follow-on public offer of state-owned Power Grid Corporation of India Ltd (PGCIL) that included a 4 per cent disinvestment by the government last week was subscribed 6.7 times.

Back under the spotlight

* A call on how to proceed with the 5% disinvestment in CIL will be taken by month end,stake sales in HZL and Balco will also be taken up soon

* BHEL,EIL,HAL and IOC are likely to be brought to the market in the fourth quarter of the fiscal

* Disinvestment is back in the spotlight as tax collections are laggard and the subsidy bill is likely to overshoot the Budget target

* Proceeds from stake sales are expected to help keep the fiscal deficit at the targeted 4.8%

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