 "Disinvestment chart")
With government garnering about Rs 21,500 crore from disinvestment already, current financial year is set to surpass the best ever stake sale performance recorded in 2009-10 with Rs 23,553 crore worth of proceeds from stake sale.
Riding high on the good results of NTPC offer for sale (OFS) on February 7, which collected Rs 11,469 crore, the department of disinvestment (DoD) is now optimistic of the final figure for 2012-13 reaching Rs 27,000 crore by the end of the financial year.
The concretization of the roadmap in consultation with the concerned ministries and departments is in the final stages.
The main reason behind the enthusiasm of the finance ministry on disinvestment is good response to the NMDC, OIL and NTPC FPOs, especially foreign investors.
While OIL OFS on February 1 fetched Rs 3,141.93 crore and FIIs cornered 60.36 per cent of the offer, FIIs’ share in NTPC OFS stood at 44.92 per cent.
If the department of disinvestment (DoD) succeeds in completing OFS of all the companies in the pipeline for the financial year, the government would be able to surpass the Rs 30,000 crore budget target and could be around Rs 34,000 crore.
DoD officials, however, point out that the proposed SAIL OFS will not happen this year and this is the reason why they are now targeting Rs 27,000 crore only in 2012-13.
Companies in line for disinvestment the remaining part of this financial year are: MMTC, RCF and Nalco.
Roadshows for MMTC and RCF stake sale has already begun and the DoD has slated to complete the disinvestment in all the three companies in March.
No disinvestment has been planned for February as the government wanted to give a breather after the NTPC offer for sale. The finance ministry also wanted to avoid pre-Budget market volatility, he added.
In the next financial year, besides Coal India, Indian Oil and EIL, other companies which are set to be in the list of possible candidates include SAIL, PGCIL, NHPC and National Electric Power Company (Nepco).
With these, cabinet approval has already been accorded for disinvestment in Bhel, Neyveli Lignite, Hindustan Aeronautics and RINL.
In case of RCF, it is considering to disinvest 12.5 per cent paid-up equity share capital comprising of 6,89,61,012 shares of face value of Rs.10 each, out of its shareholding of 92.5 per cent in the domestic market through OFS.
Through the stake sale in Nalco which was deferred last year, the government intends to disinvest 12.15 per cent out of its shareholding of 87.15 per cent through OFS.
In MMTC, disinvestment of 9.33 per cent paid-up equity share capital comprising 93.3 million shares of face value of Rs 1 each out of the government’s shareholding of 99.33 per cent has been put on the OFS.
The Cabinet Committee on Economic Affairs (CCEA) has also approved the proposal for raising 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.
Next financial year, Indian Oil is likely to be the highlight of the government’s disinvestment programme.
As on December 31, government stake in IndianOil stood at 78.92 per cent.
The DoD game plan for 2013-14 is to sell government stakes in at least two to three blue-chip companies and also in two to three companies in which mandatory public shareholding norms had to be met.
According to the plan, the government is targeting to launch a follow-on public offering for Engineers India Limited after April.
DoD officials pointed out that stake sale in power companies would be crucial in the next financial year.
While Coal India disinvestment may turn out to be the mega issue for 2013-14, Indian Oil is also slated to play a crucial role in meeting disinvestment target next year.
From April 1, 2013, the government is also set to restart the initial plan of putting disinvestment proceeds in the National Investment Fund (NIF) discontinuing the current process of directly utilizing the stake sale money for identified social sector schemes.
The NIF money will be utilized for bank recapitalization and also for subscribing to the Central Public Sector Enterprises’ share offers.
