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To reach stake sales target, FinMin lines up PSUs for disinvestment

The finance ministry plans to raise funds through the exchange traded funds for central public sector enterprises.

Written by Surabhi | New Delhi | Published: July 16, 2014 1:09:39 am

With a highest-ever target from stake sales this fiscal, the finance ministry is lining up a number of public sector firms for disinvestment including ONGC, SAIL, HAL and RINL and is also planning to re-visit the PSU exchange traded fund.
“For a number of proposals approvals are yet to come, but we already have Cabinet approval for stake sales in some PSUs from last fiscal. We will be pursuing these,” Ravi Mathur, secretary, department of disinvestment told The Indian Express.

While Mathur declined to comment on any stake sales that are yet to be approved by the Cabinet, sources said that the government is planning to sell five per cent stake in state run Oil and Natural Gas Corporation that could raise over Rs 17,000 crore. A draft Cabinet note has been floated and will be taken up soon.

Mathur said the government will sell 10 per cent stake in Hindustan Aeronautics as well as Rashtriya Ispat Nigam this fiscal. Both these would be initial public offers and are expected to fetch at least Rs 8,000 crore each. The Centre is also readying plans for a 5 per cent stake sale in SAIL that would raise over Rs 1,500 crore. Mathur also expressed confidence that the Centre would raise more than the Budgeted Rs 15,000 crore from residual stake sales in Hindustan Zinc Ltd and Balco. “We will be proceeding with these two deals this fiscal,” he said.

Meanwhile,the finance ministry also plans to raise funds through the exchange traded funds for central public sector enterprises.

“Last year, we launched the ETF. We have another approval for another tap from the ETF. We also have an option of launching a fresh ETF. So both options are available for us,” said Mathur, adding that the quantum of funds to be raised is yet to be decided.

As part of its disinvestment strategy, the government had in March this year launched the CPSE-ETF by selling off small stakes in 10 PSUs. That helped to raise over Rs 3,000 crore.

The Budget has upped the target for proceeds from disinvestment to Rs 58,425 crore for the fiscal as against the Interim Budget estimate of Rs 51,925 crore. Both the estimates had factored in Rs 15,000 crore from residual stake sales.

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