Major Disinvestment Push

The government has kicked off the most ambitious disinvestment programme ever, aiming to mop up a record Rs.46,000 crore by selling shares in blue-chip public sector companies-Coal India, ONGC and National Hydroelectric Power Corporation (NHPC). While the exact dates are yet to be finalized, SAIL's disinvestment, which was cleared earlier, is likely later this month, with a 10% stake sale in Coal India expected around Diwali.The energy behemoth will help the government raise around
Rs.23,600 crore based on its current share price. If prices hold, this sale alone could match the best ever disinvestment receip ts of Rs.23,957 crore in 2012-13, when the government had sold shares of NTPC and NMDC, among others.
ONGC, where the govern ment can garner close to Rs.19,000 crore via a 5% sale, is expected later in the year as the Centre is awaiting clarity on gas prices before the issue. Somewhere during the course of the year, it will also sell 11.3% in NHPC which, going by current price, will help generate around Rs.3,100 crore.
Apart from helping improve the government's fiscal health, the issues come with the additional attraction of a higher quota for retail investors as 20% of the sale in case of offer-for-sale, or auction through stock exchanges, will be set aside for small investors.Now, market regulator Sebi has provided additional flexibility for these issues. There are several other companies, such as BHEL, Power Finance Corporation and REC, which are also on the disinvestment department's radar but their stake sale has not been cleared by the cabinet committee on economic affairs. Then, there is Axis Bank, where the government is looking to sell shares held by the Specified Undertaking of the erstwhile UTI, although ITC and L&T, two other prominent stocks, are being retained. The government holds these shares after it cleared all liabilities of UTI. Further, the Centre is looking to offload its remaining shares in Hindustan Zinc and Balco, which had been sold to Anil Agarwal's Sterlite Industries during the Atal Bihari Vajpayee government's term.
Finance minister Arun Jaitley -who attended Wednesday's cabinet meeting within hours of being discharged from hospital -has budgeted for disinvestment receipts of over Rs.58,000 crore during the current fiscal. Going by current trends, he appears to be on course to meet the target.