The government is likely to sell stakes in five more companies in the current financial year with the National Mineral Development Corporation (NMDC) seeing disinvestment before December 15.
After 10 per cent disinvestment in NMDC, there is likely to be a lull for some time because of the holiday season. “Till early-January, foreign institutional investors will not be available, so, the remaining issues are likely to happen after the first week of 2013,” said a senior official.
The NMDC issue is likely to be followed by Oil India Limited (OIL) and then National Thermal Power Corporation (NTPC). Other offers will include MMTC and Nalco. With only four months in hand, five issues are expected to come back-to-back. “There will be lot of fund-raising through public offers by the government and private companies in the next four months. So, bunching will be an issue but the market can absorb public offers if there are attractive discounts,” said KK Mittal, head, PMS, Globe Capital.
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The issues of OIL and NTPC Ltd are likely to hit the market in January. The groundwork for the OIL issue is already completed with merchant bankers already in place. The issue is expected to fetch around Rs 2,500 crore. Another 9.5 per cent disinvestment in NTPC is expected to bring in Rs 12,000 crore.
The government is aiming to earn Rs 30,000 crore through disinvestment of its part equity. Besides, improvement in market conditions has raised hopes of it even crossing the target. Besides the five, the Cabinet Committee on Economic Affairs has also approved disinvestment in BHEL, Rashtriya Ispat Nigam Ltd and SAIL.
The government raised Rs 800 crore a fortnight back through disinvestment of 5.58 per cent equity in Hindustan Copper Limited through the offer for sale (OFS) route at Rs 155 a share. Another tranche of disinvestment of five per cent equity is expected to happen this year.
Besides Hindustan Copper, the government disinvested 10 per cent in National Buildings Construction Corporation earlier this year bringing in Rs 125 crore to its kitty. For the last two years, the government has been unable to meet its annual disinvestment target of Rs 40,000 crore. While it got only Rs 13,894 crore in 2011-12, it had raised Rs 22,144 crore in 2010-11.
With Hindustan Copper, the government is trying out the new route of OFS through stock exchanges. It has reduced the time period for sale of equity derisking the market swings to some extent.
