Encouraged by the recent rally in stocks, the government’s department of disinvestment (DoD) is trying to push stake sales in six companies before the end of this financial year (March 31).
The next round of divestment would begin with the offer for sale (OFS) of Oil India Ltd (OIL) next week, said a senior DoD official.
The Sensex has topped the 20,000 mark for the first time in two years, gaining a little over 2,800 points or 16.5 per cent since P Chidambaram became finance minister in August. A series of recent moves such as postponement of the General Anti-Avoidance Rules taxes and a loosening of the price control on diesel have helped improve the market sentiment.
“Since the market has improved, the department has also lined up the Nalco (National Aluminium) and Steel Authority of India (SAIL) disinvestment in the current financial year itself,” said the official. After OIL, the stake sale in NTPC is slated, for the last week of February.
Divestment in Minerals and Metals Trading Corporation (MMTC) and in Rashtriya Chemicals and Fertilizers (RCF) would be done in March, said the official. He said the Nalco and SAIL stake sale would be also taken up in the same month.
While the OFS in Oil India is expected to fetch around Rs 2,500 crore, the government is slated to garner around Rs 12,000 crore from the 9.5 per cent divestment in NTPC.
It has collected about Rs 6,900 crore from disinvestment in the current financial year. The year’s budget target is Rs 30,000 crore.
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In the case of RCF, it is considering divesting (through OFS) 12.5 per cent of the paid-up equity share capital, comprising 6,89,61,012 shares of a face value of Rs 10 each, of its shareholding of 92.5 per cent. Through the stake sale in Nalco, deferred last year, the government intends to disinvest 12.15 per cent of its shareholding of 87.15 per cent, again through OFS.
In MMTC, the plan is for divestment through OFS of 9.33 per cent paid-up equity share capital, comprising 93.3 million shares of a face value of Re 1 each of the government’s shareholding of 99.33 per cent.
The Cabinet Committee on Economic Affairs has also approved a proposal to raise additional equity by SAIL to the extent of 10 per cent and disinvestment of a portion of the government’s shareholding of 10 per cent through OFS.