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Govt’s sell-off programme may start this festive season

* FinMin hopeful of exceeding disinvestment target of Rs 30K crore

Written by Surabhi | New Delhi | Published: September 25, 2012 1:23:12 am

The government is set to kick off its disinvestment programme from mid-October and is expected to conduct stake sales every two to three weeks. With plans to divest stakes in over half-a-dozen PSUs through the auction route and another three or four through public offers,the department of disinvestment is now hopeful of exceeding its Budget target of Rs 30,000 crore.

“Market conditions are improving. We are getting all the paperwork and approvals so that we can line up firms for stake sales from the middle of next month. With the focus on the offer for sale method for divestment,we are now confident of overshooting the Budget estimates from stake sale proceeds,” a senior finance ministry official said.

Starting with stake sale in Hindustan Copper Ltd through the offer for sale (OFS) or auction route,the finance ministry is likely to take another six state-owned firms including MMTC Ltd,Oil India Corporation,Steel Authority of India Ltd,National Aluminum Company,Hindustan Copper Ltd,NMDC Ltd and National Thermal Power Corporation to the market through this method.

Earlier this month,the Cabinet Committee on Economic Affairs had approved divestment in four of these firms — Hindustan Copper,Oil India,MMTC and Nalco — which together may fetch around Rs 15,000 crore. The finance ministry is now in the midst of appointing investment bankers and legal advisers for the stake sales.

The government is also planning to launch public offers in about three to four PSUs including Rashtriya Ispat Nigam Ltd,Neyveli Lignite Corporation and Hindustan Aeronautics Ltd. The Rs 2,500 crore issue of RINL was deferred earlier this year due to volatile market conditions.

The government is also exploring the possibility of divesting stake in either Rashtriya Chemicals and Fertilisers (RCF) or Fertilisers and Chemicals Travancore (FCT). “We are in talks over divesting stake in one of the two firms,” the official said. While the government owns 92.5 per cent stake in RCF,it holds 98.56 per cent stake in FCT.

Faced by volatile market conditions,the government was forced to postpone the sell off process last fiscal and could raise only Rs 14,000 crore against a target of Rs 40,000 crore.

Eye on target

* Starting with stake sale in Hindustan Copper Ltd through the offer for sale route,the finance ministry is likely to take another six firms to the market through this method

* The government is also planning to launch public offers in about three to four PSUs including RINL,NLC and Hindustan Aeronautics

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