Govt tapping overseas markets to push PSU stake sale

Facing a daunting Rs 69,500-crore PSU stake sale target, the Disinvestment Department has begun tapping new overseas markets like Australia, Japan and Canada to attract their cash-rich pension and sovereign wealth funds.
Traditionally, investors from markets like the US, Europe, Singapore and Hong Kong have been tapped to invest here.
"We are now looking at new markets. We have big pension funds and sovereign wealth funds in Australia, Japan, Canada. They have shown a lot of interest," a senior government official told PTI.
To attract new long-term funds, the DoD has been stressing on market-making for successful PSU disinvestment.
"The pension funds and SWFs are long-haul investors, that is the kind of investors that we need in PSU stock. We believe that the Prime Minister has been the best brand ambassador for India and now there is a lot of curiosity among investors," the official added.

To address investor queries, Department of Disinvestment (DoD) officials, in their visit to Australia also took company representatives from NTPC, BHEL and NMDC, the official said.

"We wanted to give investors a picture of the sector. These companies represented their respective sectors. Investor were showing sector specific interest and not at any particular company," the official added.
Although the DoD has a huge pipeline of PSUs for divesting stake, it has not been able to go ahead with the stake sales on account of volatility in markets.
So far this fiscal, the government has been able to sell stake in only one PSU, REC. The DoD has a Rs 69,500-crore target from PSU disinvestment in the current fiscal, of which Rs 41,000 crore would come from minority stake sale and Rs 28,500 crore from strategic stake sale.

As per the government's disinvestment plan, the DoD would sell minority stake in PSUs through an offer for sale (OFS) in which 20 per cent of the issue size is reserved for retail investors and 25 per cent for mutual funds and domestic insurance companies.
The remaining portion is left for institutional investors, which are usually lapped up mostly by domestic financial institutions and foreign funds.