Sebi clears sell-off of BPCL, Nalco shares in India, US markets

Union Disinvestment and Communications Minister Arun Shourie said the Securities and Exchange Board of India (Sebi) has given the green sign...

Union Disinvestment and Communications Minister Arun Shourie said the Securities and Exchange Board of India (Sebi) has given the green signal for the government to undertake simultaneous disinvestment of shares of Bharat Petroleum Corporation Ltd (BPCL) and National Aluminium Company (Nalco) in the Indian and US markets.

Speaking to journalists here on Monday, Shourie said Sebi has approved the simultaneous divestment of part of government stakes in these PSUs. With this the government can now offload shares in the Indian market and issue American Depository Receipts (ADRs) for listing the companies in the New York Stock Exchange at the same time. But, he said, the government has not taken any decision in this regard.

Though Shourie refused to set a time-frame for the completion of the process, he said the core group of secretaries on disinvestment will meet soon to work out the modalities including the selection of an advisor for offloading the government stakes. But, he indicated, the government proposes to undertake the process by November.

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At present, the government holds 66.2 per cent stake in BPCL and 87.15 per cent in Nalco. The government plans to offload 25.2 per cent of the BPCL stake through ADRs, 10 per cent in the domestic market and 5 per cent at a concessional rate to the company employees.

If this goes through the government stake in the company is set to decline to 26.2 per cent from the existing 66.2 per cent. In the case of Nalco, the government holds 87.15 per cent stake in the company. In this case the government plans to divest 29.15 per cent by selling to a strategic partner while 20 per cent will be offloaded through ADRs and 10 per cent in the domestic market.

With the completion of this process the government stake in the company will be down by 28 per cent from the existing 87.15 per cent.

Shourie expressed satisfaction over the success of the Maruti IPO, stating the main reason for the success being the presence of Suzuki in the company.

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