The prolonged weakness in the domestic markets and the bellwether index Sensex closing at a 14-month low of 16,839 on Friday,has retail investors believe that the government may find it tough to meet its disinvestment target this year. There is no denying that the fund-raising activity has been slow. While the government can still meet its target,they will have to hasten up the process, said an investment banking head of a foreign bank who did not wish to be named. There are few others who voice similar views on the issue. Seven months are still there (in this fiscal) and while it will be challenging,it is not mission impossible, said the head a of a leading domestic investment banking firm. The government has,for now,deferred ONGC and SAIL issues to Q3. The finance minister told the parliament that SAIL was deferred due to market volatility,and the disinvestment department has maintained that they will wait for market to stabilise before going ahead with the issues. In the current financial year,disinvestment receipts would hold a key to governments revenue as there are no windfall revenue from 3G spectrum sale,and given the duty cuts in oil there may be a likelihood of shortfall in tax receipts. Bankers are getting apprehensive because foreign participation is limited in the current market. Net FII investment in this period has stood at just Rs 4,871 crore against Rs 133,266 crore in 2010. I do not see that the total fund raising through equity that stood at around $30 billion last year is possible this year as it currently stands at around $8 billion this year, said,Dilip Kadambi,MD,RBS Investment Banking.
