Govt to collect Rs 15,425cr via selloffs

With the closure of the Oil and Natural Gas Corporation (ONGC) issue, the government is expected to rake in Rs 15,425 crore through sale of government equity during the current fiscal. The government has overshot its disinvestment target of Rs 14,500 crore by Rs 900 crore, or 6.2 per cent.

Terming the divestment initiative of the government highly successful, Disinvestment Minister Arun Shourie said the amount raised from these six issues "" Gail India, ONGC, Dredging Corporation of India, CMC, IBP and IPCL "" was 25 per cent more than what was cumulatively raised in the equity markets since 1998-99.

While the revenue generated from the six issues is Rs 14,122 crore, around Rs 1,300 crore was raised from the earlier issues.

"The disinvestment ministry would hope to capitalise on the strong investor sentiments for India in the months to come," he said.

The government has mobilised Rs 1,200 crore from the IPCL public offer, Rs 352 crore from IBP, Rs 190 crore from CMC, Rs 221 crore from DCIL, Rs 1,625 crore from Gail and Rs 10,534 crore from the offering in ONGC. This is in addition to Rs 1,300 crore raised from the earlier issues, including Hindustan Zinc and Maruti Udyog.

"The price-earnings ratio for all the six issues have been in the range of 8.5-30.3, compared with 4-6 during the 1991-1998 period," Shourie said. He said the six issues had attracted 1.6 million retail investors and several foreign investors, which indicated a widening of the equity base.

The successful completion of ONGC's offer had blown away concerns about the bunching of government issues and insufficient retail investor interest, Shourie said.

He said the six government issues had raised Rs 1412.6 crore in less than three weeks and the amount was 25 per cent higher than that raised by all issues since 1998-99.

The Indian economy, Asia's third-largest, is one of the world's fastest growing but a yawning fiscal deficit prevents it from realising its full growth potential, analysts say.

The government's ambitious privatisation programme that seeks to supplement revenue has had a few notable successes over the past decade but has also been plagued by opposition from trade unions, politicians and legal hurdles.