PSU stake sale Centre set to provide big push to retail participation

Campaign for opening up of demat accounts likely to be undertaken

PSU, Central government, Retail business, demat accounts, investor education, Business news

As it gets set for selling stake in near a dozen public sector units over the next few months, the government is hoping to give a big push to retail participation.

The department of disinvestment has written to the department of economic affairs to work out a strategy to enhance retail participation in stake sales.

Measures such as a campaign on investor education and awareness as well as a drive for opening up of demat accounts could be considered.

“Participation by retail investors in disinvestment issues is often low compared to that of institutional investors due to a lack of awareness. We had written to the department of economic affairs a few months back calling for measures to improve their awareness on the lines of the financial inclusion campaign,” said a senior government official, adding that they are hoping for some measures in this direction over the next few months.

Additionally, the time taken to open a demat account could also be rationalised, said a second official.

Over the past few months, the government has been working to attract more participation by retail investors in disinvestment issues as it tries to ensure more public ownership in PSUs.

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The government also offers retail investors or small investors who can invest up to Rs 2 lakh in a public issue, a discount of 5 per cent in stake sales of PSUs.

While the 5 per cent stake sale of state-run Rural Electrification Corp through the offer for sale (OFS) route in April this year, registered healthy response from retail investors and their quota was oversubscribed by nine times, this is not always the case.

For instance, the 10 per cent disinvestment in Coal India was largely driven by domestic and foreign investors.

With a target of Rs 41,000 crore from minority stake sales this fiscal, the department of disinvestment is readying 10 PSUs including Oil India Ltd (OIL), NTPC Ltd, ITDC, Container Corporation of India Ltd (Concor) and Hindustan Copper for disinvestment to help raise over Rs 25,000 crore.

Demat account in short time

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# Over the past few months, Centre has been working to attract more participation by retail investors in disinvestment issues as it tries to ensure more public ownership

# Time taken to open a demat account could also be rationalised. Centre offers to those who can invest up to Rs 2 lakh in a public issue, a discount of 5 per cent in PSU stake sales