Investors from Gulf evince interest in the government’s disinvestment programme
During the five-day road shows in the Gulf countries last week to attract qualified foreign investors (QFIs), the finance ministry listed out over a dozen public sector undertakings (PSUs) in which the government could look at diluting stake during 2012-13. These companies include NMDC, BHEL, SAIL and Oil India.
Economic Affairs Secretary R Gopalan, who had led the ministry officials on the first two days of the road shows, had said those who attended these road shows were interested in knowing which were the companies slated for disinvestment.
According to a senior finance ministry official, the government is considering disinvestment in as many as 15 PSUs, including 10 per cent stake sale each in Nalco, NHPC, NMDC, MOIL and Hindustan Aeronautics (HAL).
The finance ministry’s road shows were conducted at five places in the Gulf region — Riyadh, Dubai, Muscat, Kuwait and Bahrain — projecting India as an “incredible investment destination”.
The government had planned to kick off the disinvestment process with Rashtriya Ispat Nigam Limited (RINL) initial public offer, which was to hit the market on July 3.
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However, the Rs 2,500-crore issue has now been delayed by at least three weeks on account of volatile market conditions, .
The road map for the whole financial year prepared by the ministry targets NMDC disinvestment to yield Rs 6,000 crore, NHPC Rs 230 crore and MOIL Rs 395 crore.
The Department of Disinvestment has already moved a Cabinet note for 10 per cent stake sale in Nalco, which could bring around Rs 12,000 crore, based on the current market price, according to the ministry’s calculations.
In case of Hindustan Copper, the government would divest 10 per cent stake. For this, consultations have already begun with the ministries concerned to take it to the Cabinet.
The plan for SAIL divestment includes a five per cent dilution of government stake, and the company would also come out with a fresh issue of the same quantum.
The five per cent stake sale in BHEL is estimated to fetch around Rs 3,000 crore. The government, in the Union Budget for 2012-13, proposed to raise Rs 30,000 crore in the current financial year from sale of its equity in PSUs.
The Department of Disinvestment is also planning to sell 10 per cent stake in Engineers India, which could earn about Rs 790 crore for the the exchequer.
The sale of 12.5 per cent stake in Rashtriya Chemicals Limited (RCF) is expected to yield Rs 380 crore, while divestment in Andrew Yule is estimated to garner Rs 65 crore.
The finance ministry now expects that investment from at least one foreign retail investor from the Gulf region would come to the country within a month.