Economic upswing may help lower bar for disinvestment in 2011-12

While the disinvestment roadmap for 2011-12 is still being finalised as part of the Budget making exercise,about six to seven state run firms are expected to launch public offers. The follow-on public offer of Hindustan Copper Ltd HCL,which was originally scheduled for December this year,has now been pushed back and could start the sell-off parade for 2011-12.

The government is keen that the two blockbuster issues of Steel Authority of India Ltd and ONGC Ltd in the coming months gather sufficient interest. So it was decided that HCL can be kept for early next fiscal, a merchant banker managing the offer said,cautioning that the decision could be reversed later due to market conditions.

The Rs 4,000 crore public offer by HCL includes disinvestment of 10 per cent government equity along with the company issuing equity of the same proportion.

MMTC Ltd,IndianOil Corporation,Steel Authority of India Ltd,Rashtriya Ispat Nigam Ltd and Power Finance Corporation are some of the other PSUs that are likely to hit the market with public offers in the coming fiscal.

The Centre had fixed an ambitious Rs 40,000 crore target from stake sales in the current fiscal. The government has already garnered Rs 22,000 crore from disinvesting its stake in about six firms including SJVN Ltd,Engineers India Ltd,Coal India Ltd,PowerGrid Corporation,Manganese Ore India Ltd and Shipping Corporation in the current fiscal.

With Hindustan Copper Ltd out of the agenda for 2010-11,the Centre is now likely to finish the fiscal at about Rs 38,000 crore. The public offers by SAIL and ONGC are expected to fetch Rs 4,000 crore and Rs 11,000 crore respectively.