Left sees red when all others see green

Promptly, as if on cue, the CPM Politburo and the CPI have attacked the Government’s decision saying they were not consulted and that i...

Promptly, as if on cue, the CPM Politburo and the CPI have attacked the Government’s decision saying they were not consulted and that it should be stopped. Maybe they should take a look at what’s happened in other PSUs where similar disinvestment took place: all stakeholders—including the government, retail investors and PSU employees—have seen a gain, albeit a notional one, of Rs 4,171 crore in four PSUs since March 2004.

Thanks to a rising stock market, investor faith in the four PSUs, NTPC, ONGC, GAIL and Dredging Corp, points the way to the benefits of unlocking valuable public sector paper. A CMIE estimate says the government can raise a staggering Rs 123,000 crore by bringing down its stake in public sector companies and banks and still retaining management control.

The maximum gain to shareholders has come from ONGC, which offered shares at Rs 750. This has now jumped by 20 per cent to Rs 901.80, making investors richer by Rs 2,164 crore. NTPC — which came out with an IPO late last year — was not behind with its shareholders gaining Rs 1,766 crore.

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In the case of NTPC, more than 65% of the employees applied for the shares and employee quota was oversubscribed 2.17 times.

The profit of employees on the listing day was Rs 29 crore. With the share price now ruling at Rs 82.40, employees’ gain would be over Rs 40 crore.

On the other hand, ONGC employees who did not apply for the shares are regretting the decision now. ‘‘Many banks had offered loans at good rates then. They never thought prices will go up,” said a market source.

Analysts say BHEL could witness a good response from the market if the government prices the shares attractively. Market experts have been advocating a greater role for retail investors in PSU share offerings.

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‘‘The most crucial factor in the IPO is pricing. If it’s not priced properly, investors will suffer losses and they will keep away from IPOs. We have seen this in some of the offers recently,” said NSE dealer Pratip Bhavnani.

Market watchers also add that disinvestment through public offering is a better idea as the government can realise the right value and retain control while investors can participate in the disinvestment process.

Sources in the LJP (RV) said the names of the remaining 15 candidates would also be announced very soon.

Bihar polls: Chirag Paswan’s LJP (Ram Vilas) announces first list of 14 candidates

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Lok Janshakti Party (Ram Vilas) announced its first list of 14 candidates for the Bihar assembly polls, with its state unit chief Raju Tiwary and leader Hulas Pandey among the nominees. As per the seat-sharing arrangement, LJP (RV) will contest 29 seats, while BJP and JD(U) will contest 101 seats each. The remaining 15 candidates will be announced soon.

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