Disinvestment target may be raised to Rs 40,000 cr in FY'14

Encouraged by the response of foreign investors to public sector undertaking (PSU)’s stake sale, the government is proposing to raise the disinvestment target to Rs 40,000 crore in the next financial year by selling equity in 20 companies.

"As per the discussion within the disinvestment department, initial estimate is that, next year's target will be somewhere around Rs 40,000 crore," a source said.

So far this financial year, the government has raised Rs 21,500 crore against the target of Rs 30,000 crore. Department of Disinvestment (DoD) Secretary Ravi Mathur has already said the government would try to raise Rs 27,000 crore in this financial year ending March. The DoD, the nodal department for stake sales in PSUs, has already identified 20 companies for offloading minority stakes in the 2013-14 financial year.

Sources said work was already in progress for lining up companies for minority stake sale in the next financial year and DoD officials were already meeting the administrative ministries and company officials for executing it on time. The companies that have been identified for disinvestment include Coal India, IndianOil, Power Grid Corporation of India Limited, NHPC, National Electric Power Company and Tehri Hydro Development Corporation Ltd.

Apart from these, Cabinet approval has already been accorded for disinvestment in Bharat Heavy Electricals Ltd, Neyveli Lignite Corp, Hindustan Aeronautics.

The second tranche of Hindustan Copper Ltd (HCL) is also likely to take place in the April-June quarter. Buoyed by the resounding success of Oil India and National Thermal Power Corporation (NTPC) disinvestments earlier this month, the government expects that an early start to the divestment process next year could help in garnering higher funds.

In November 2012, DoD sold a 5.58 per cent stake in HCL for about Rs 807 crore and 10 per cent in National Mineral Development Corporation to raise around Rs 5,900 crore.

Besides, a 10 per cent stake sale in Oil India Ltd fetched Rs 3,141 crore and a 9.5 per cent in NTPC garnered Rs 11,496 crore to the exchequer this month. Stake sale of National Aluminium Company, Metals and Minerals Trading Corporation of India, Steel Authority of India Ltd and Rashtriya Chemical and Fertiliser is also scheduled for current financial year.