Gujarat may not sell stakes in PSUs

More investment likely in the panchratnas following their turnaround in the third quarter

In contrast to rumours about the state government's divestment plans, Gujarat chief secretary P K Laheri on Monday said the government is planning to hike investment in five public sector undertakings.

All these five state-owned firms "" Gujarat Alkalies and Chemicals (GACL), Gujarat Narmada Valley Fertilisers Company (GNFC), Gujarat Mineral Development Corporation (GMDC), Gujarat Industrial Power Corporation Ltd (GIPCL) and Gujarat State Fertilisers & Chemicals (GSFC) "" are listed on the Bombay Stock Exchange.

Laheri, who is also the chairman of GACL, GNFC and GSFC, said: "The question of divesting the government's stake in these panchratnas of Gujarat does not arise as the government has decided to invest more in these firms which have strengthened their bottomlines during the third quarter of the current fiscal."

GACL has posted a 209 percent rise in its net profit in the third quarter. The government has decided to invest Rs 95 crore in GNFC, which has reported a 219 per cent rise in its net profit at Rs 56.02 crore.

The Bharuch-based fertiliser and chemical major has also reported a 54 per cent dip in interest cost for the nine months period at Rs 12.32 crore.

With an investment of Rs 58 crore, GNFC is setting up an air separation unit, which would be commissioned by April. For a 30 metric tonne per day (MTPD) capacity methanol synthesis project, the company has earmarked an investment of Rs 30 crore as the project would be completed by this December.

"GNFC has already conceived a capital outlay of Rs 1,700 crore for the recast of its existing plans. These plans would boost the turnover and earnings of the company," said Laheri.

"GACL managed to post the highest ever profit this quarter. We have already decided to invest Rs 115 crore in our latest board meeting held on December 28 in addition to our Rs 217 crore investment finalised during October," company managing director P K Taneja said.

GSFC, considered to be the weakest enterprise run by the state government, has reported a 58 percent rise in operating profit to Rs 132.87 crore.

"The profit before tax was Rs 150.23 crore as against a loss of Rs 42.24 crore in the corresponding period of 2003-04," said A K Luke, managing director of GSFC.

The market capitalisation of GSFC, the Vadodara-based company, has increased from Rs 112 crore in April, 2003 to Rs 789 crore.

GMDC has also improved its financials during the quarter as its net profit stood at Rs 32.39 crore against Rs 27.99 crore in the corresponding previous quarter.

Sudha Anchalia, chairman and managing director of GMDC, said on Sunday, "The government can only decide about divestment, but there is nothing so far on the cards."

GIPCL also needs fresh investment as the company is going to set up a 250 mw power plant near Surat at Rs 997 crore. According to government officials, there is hardly any chance of the government divesting its stake in GIPCL like the other four firms.