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Ruling out the option of going to the capital market for Bhel's stake sale, government today said it might choose the cross-holding route for 5% divestment in the state-owned power equipment maker.
Under this route, a public sector unit buys stake into another PSU.
Cross-holding is not a bad idea as long as the PSUs hold on to each other, Minister of Heavy Industry and Public Enterprises Praful Patel told reporters here.
However, he added: "Certainly, that is not true divestment".
The government plans to raise about Rs 1,200-1,300 crore through Bhel stake sale.
"As far as Bhel stake sale is concerned, we have ruled out going to the market for 5% divestment because we feel that market conditions are not suitable for the moment for such a valuable company to be sold in the open market," Patel said.
On being asked whether the department will opt for the cross-holding route, the one being followed by IOC, Patel said: "There are some views which have been expressed but nothing has been finalised. That (cross-holding) is one of the options but we have not decided anything yet, but certainly we are not going to the market."
Earlier this month, an Empowered Group of Ministers, headed by the Finance Minister P Chidambaram, approved cross- holding for selling government's 10 per stake in Indian Oil Corp to ONGC and Oil India.
"As far as we are concerned... These are the issues which the Finance Ministry has to decide," Patel said when asked whether the stake sale will be completed in this fiscal.
The Finance Ministry has already laid out a roadmap for disinvestment in the remaining days of this financial year, ending March 31. It includes stake sales in major PSUs such as Engineers India, Bhel and Hindustan Aeronautics.
Although the government had budgeted raising Rs 40,000 crore from PSU disinvestment, it has so far garnered only Rs 3,000 crore from stake sale in seven PSUs, including Power Grid Corporation of India, Hindustan Copper, National Fertilisers and MMTC.
