Ministry okays stake sale in Maruti, BHEL

The heavy industry ministry has consented to the finance ministry's suggestion for part disinvestment of the government's equity in bluechip PSU Bharat Heavy Electricals Ltd and automobile joint venture Maruti Udyog in the current financial year.

It, however, asked the finance ministry to consider the respective weight for the public and financial institutions during the public offer fearing foreign financial institutions would strive to get most of the shares of these profit-making companies, ministry sources said.

The finance ministry would now moot a formal proposal for disinvestment of 5 per cent in Bhel and the sale of the residual 18.24 per cent stake in Maruti Udyog in phases, they added.

The move is a part of the effort to garner resources for social sector schemes, to which the Manmohan Singh government is according the highest priority.According to the present share prices, the sale of 5 per cent equity in Bhel may fetch the government about Rs 950 crore.

Likewise, the value of the government's equity in Maruti at current prices is more than Rs 2,445 crore. "The public offers for both the companies are likely to be completed this financial year," sources said.

With the heavy industry ministry, under whose administrative control the two companies fall, favourably inclined towards divestment, the finance ministry might float a proposal for the consideration of the Cabinet either later this month or in early February, sources said.

After selling 5 per cent stake in Bhel, the government's stake in the company will come down to 62.72 per cent from 67.77 per cent at present.

After the Maruti IPO, the government's stake in the auto maker has come down to 18.24 per cent. It had an option till June this year to sell its 18.24 per cent stake in the manner it would have liked.

Instead of selling its stake in Maruti to Suzuki, the government is inclined to offload it in the open market.

Maruti's shares today ruled at Rs 446.40, while the BHEL scrip was priced at Rs 760.