NEW DELHI, SEPT 15: The finance ministry has decided to offer the shares of the Container Corporation of India (Concor) and Indian Oil Corporation (IOC) to retail investors at a discount in the domestic market immediately after the first tranche of disinvestment to institutional investors.This is a part of a two-pronged strategy, chalked out by the ministry, to push the Rs 5000-crore disinvestment programme in the current fiscal and at the same time to give a fillip to the capital markets by introducing good scrips.Finance ministry sources said: "We are confident of the success of the disinvestment programme this year. The idea behind offering the PSU stakes to retail investors at a discount is to give a fillip to the primary market. In a way, the IOC and Concor issues will be the acid test for the government's twin strategy of bridging the fiscal deficit (through the successful disinvestment programme) and propping up the primary market."The government's decision to offer PSU scrips at the discountto the retail domestic investor was prompted According to the plan, the roadshows for all the four PSU disinvestment plans will be kicked off in Mumbai which will be followed up in Hong Kong, Singapore and other parts of the world. "We are not particularly keen on raising funds overseas. If the local institutions are willing to offer a good price, we will offload the stakes to them and not hawk the global depository receipts to foreign institutional investors. The FIIs can, however, will have the option to pick up stakes in Mumbai," the sources said.Unlike the previous years, this time the process will begin with common book building at Mumbai and the exercise will be continued at other important financial centres the world over. The government will offload its equity at the best available prices, may it be domestic or GDR market.Although the financial institutions will have to quote their prices in rupee, the foreign institutional investors will have the choice to quote their offers in foreigncurrency even at Mumbai book building. The FIIs will have the option to buy shares in Mumbai or elsewhere.Since the government is not looking for 100 per cent underwriting facility offered by Indian institutions, it will not offer the "ratna" shares to institutional investors at a discount."This question does not arise at all. At the second stage, we will offer the PSU shares to the retail investors at a discount. This is a part of the strategy to give a leg-up the capital market," the sources clarified.
