Disinvestment secretary Mohd Haleem Khan talks to Santosh Tiwari on the revised stake sale targets for the year and the lessons learnt from the past. Edited excerpts:
This year should be better in terms of disinvestment, with the extended ambit?
The finance minister has tried to give a very clear message that the budget numbers should look credible. There were arguments for keeping the (year’s disinvestment) target at Rs 40,000 crore or more. These were discarded consciously. If we would have gone for Rs 40,000 crore, the (estimated) fiscal deficit would have come down to around five per cent of GDP. If we would have gone for more, it would have been less than five per cent of GDP. There was a great lure and some people thought this might be a great idea. But then, all things taken together, it was found that for the past three years we could not achieve the disinvestment target. If we’d put up any figure more than or as big as that, it would not carry the (needed) credibility.
You have options like auction and buyback. Won’t these help in reaching higher level of disinvestment in 2012-13?
If it’s doable, who is going to stop us? The target doesn’t mean you can’t do beyond that. It’s good to provide for it conservatively and over-achieve, rather than provide ambitiously and under-achieve it.
The pipeline of companies for next year’s disinvestment is already there. Which are the next candidates?
I think NBCC would be the first candidate in 2012-13. I don’t think the money from this will flow in before March 31. So, that would be the first. RINL has also been cleared by the Cabinet and they have to guard against losing their Navratna status. Because of that, RINL is a very good candidate to come up ahead in the queue. After that, we have been talking about BHEL and Oil India. And, we have those two-three cases going on for so long, like HCL and SAIL. Similarly, there are MMTC and Neyveli Lignite. They are listed and traded but don’t comply with the 10 per cent issuer requirement. They will have to comply and come to the market. So, a pipeline is there. Let’s hope for the best and do Rs 30,000 crore ahead of time.
What about the ONGC auction experience? What changes are now expected in the whole process?
We have to plug those technical and communication issues where the matching of bids and funds could not be tallied on a real-time basis. We have received inputs from the merchant bankers and stock exchanges. I am sure Sebi (the Securities and Exchange Board of India) would like to have a look at all options, to see whether the offer for sale process requires further tweaking so that this does not happen again. By the end of April, I hope, these things should fall in place. Then, we can take the candidates considered good for this option.
So, the next auction will happen only after April?
No, it can happen earlier. It depends on how much time and what suggestions we get. Initially, we thought ONGC was a big issue and we were trying for the first time, so we said let both the stock exchanges (BSE and NSE) be the auction platform. As things developed and issues of coordination and real-time sharing of information came up, which have become so important in the auction process, I don’t think we are going to try both the platforms any more. In future auctions, there will be only one platform.
Similarly, at the time, everybody said the numbers are very big, so why not keep it open for a longer time, but the way the bids came, it seems people like to keep their bids till the last moment. They want to watch the market, because there is a parallel trading on in the secondary market. They like to assess the situation. So, one may take a call and say it should not be open for more than two-three hours.