OIL,NHPC on top of new divestment list

Even as the disinvestment department starts preparing a fresh list of PSUs for disinvestment in the medium term...

Even as the disinvestment department starts preparing a fresh list of PSUs for disinvestment in the medium term,OIL and NHPC have emerged in the first batch of companies where stake sale could be done soon. These two PSUs had received Cabinet approval during the UPAs previous tenure. The permission given in 2007 is for selling 10 per cent government stake in OIL and 5 per cent in NHPC in the primary market.

In its first term,the UPA governments disinvestment roster comprised about 25 companies. But the plans got scuttled after opposition from the Left,an important ally. The Left,which broke away from the UPA on the nuclear deal,has got a drubbing in the 2009 general elections.

The new list will have names that are conducive to all members of the present coalition, a government official told The Indian Express. For instance,Neyveli Lignite located in Tamil Nadu,may be knocked out of the list given the M Karunanidhi-led Dravida Munnetra Kazhagams (DMKs) opposition. And similarly,Hindustan Photo Films,which too was part of the earlier list prepared by the UPA in its first tenure,may not be taken up following Trinamool Congresss reservations.

Other companies that are unlikely to be on the new list are those recommended for revival by the board for reconstruction of public sector enterprises (BRPSE). The government would want the administrative departments to ensure their turnaround so that they fetch a better valuation in due course, another official said. In the case of sick companies such as Hindustan Cables,the government may consider handing them over to profit-making PSUs. As strategic disinvestment is not possible and these need to be turned around,this is one of the options under consideration, the government official said. The UPA has,as of now,ruled out strategic disinvestment as a possible route. The idea of offloading government stake to a private player is seen as politically unpalatable. The only way out for the government is to let public sector undertakings (PSUs) list themselves in the capital market,according to officials. This process could take anything between six months and a year as their initial public offering will need approval from the Securities and Exchange Board of India.

Some of the PSUs that are expected to make it to the new list being prepared could include Bharat Sanchar Nigam,Rashtriya Ispat Nigam,Coal India,Hudco,Export Credit Guarantee Corporation,Indian Railway Finance Corporation and North East Electric Power Corporation Ltd.