Divestment target within govt's reach

North block pushing for sale of government equity in Maruti Udyog and Bhel

The Centre is expected to easily cross its disinvestment target of Rs 4,000 crore for the current fiscal year, with the finance ministry pushing for the sale of residual stake in Maruti Udyog Ltd and at least 5 per cent divestment in Bharat Heavy Electricals Limited (Bhel).

The ministry hopes to generate around Rs 2,000 crore through the sale of equity in these companies in the current fiscal year. The government holds 67.7 per cent stake in Bhel and 18.2 per cent in Maruti Udyog.

It has already generated Rs 2,600 crore through the sale of 5.2 per cent stake in National Thermal Power Corporation.

The government has also decided to accept capital from public sector banks by selling a part of its stake through a public issue.

Punjab National Bank, which is planning a public offer in March, is expected to contribute about Rs 1,000 crore to the government's disinvestment kitty.

Power Finance Corporation and Power Grid Corporation of India are the other companies on the Centre's disinvestment list for the year.

The government is also bound by the shareholder's agreement to sell its residual 49 per cent equity in Balco and is hoping to complete the transaction during the current fiscal year.

While 44 per cent stake is to be sold to Sterlite, the remaining 5 per cent is proposed to be offered to employees.

"We have been pushing for divestment in Maruti and Bhel in this financial year. We want to do it this year, otherwise there could be problems for fiscal deficit," said a finance ministry official.

Finance Minister P Chidambaram has already met Prime Minister Manmohan Singh over this issue, he said, adding, "Even a 5 per cent stake sale in Bhel will give us a substantial amount."

Officials in the heavy industry ministry, the nodal ministry for Bhel and Maruti, had earlier been arguing against the immediate sale of equity but later veered around to the view that they would consider the proposal to improve the Centre's financial position.

Selloff list

The target: To net Rs 4,000 crore from diluting government equity

Mega offers

Generated Rs 2,600 crore through the sale of 5.2% in National Thermal Power Corporation

Plans to sell 18.2% stake in automobile major Maruti Udyog and 5% of the 67.7% stake in Bhel to rope in Rs 2,000 crore

Others lined up

Punjab National Bank IPO in March is expected to contribute about Rs 1,000 crore

Power Finance Corporation and Power Grid Corporation of India are the other companies on the Centre's disinvestment list

Govt to sell its 49% residual stake stake in Balco