Govt to kick off New Year with public offers of 3 navratnas
New Delhi   20-Oct-2010

The government has reviewed its share sale line-up and the New Year will kick off with public offers by three blue chip navratna companies including Steel Authority of India Ltd (SAIL), IndianOil (IOC) and ONGC Ltd, although plans to divest stake in state owned MMTC Ltd and Rashtriya Ispat Nigam Ltd has been pushed to next fiscal.

“During the first quarter (January-March) of next calender year, we will see the public offerings of SAIL, IOC and ONGC,” disinvestment secretary Sumit Bose said on Tuesday during a roadshow for the initial public offer by Coal India.

The public offer by steel major SAIL will include sale of 5 per cent government stake along with the issuance of 5 per cent equity by the government, while that in IOC would involve disinvestment of 10 per cent of government equity along with the company selling an equal amount of of fresh equity. The Centre also plans to sell 5 per cent of its equity in ONGC.

The three FPOs are expected to fetch a neat Rs 30,000 crore and help the government exceed its target of Rs 40,000 crore from disinvestment proceeds this fiscal.

The details of FPO of petroleum major Indian Oil will be decided shortly, Bose said adding that the firm is likely to invite applications for the appointment of merchant bankers in a couple of days.

According to the re-jigged line, four PSU issues are scheduled for the November to December quarter, after the Coal India offer. These include the stake sale in PowerGrid Corp after Diwali, which would be followed by disinvestment in Shipping Corp, Hindustan Copper and Manganese Ore India.

However, the government, Bose added, will not go ahead with the public issues of the trading company MMTC and steel producer RINL in the current fiscal. “We will look at (RINL) it in the next fiscal,” he said.

With the Coal India IPO fully subscribed on its second day, the department of disinvestment is confident that investors would lap up seven PSU issues in a period of six months. “There is enormous appetite in the market,” Bose said, adding that the disinvestment programme is not aimed at financing the fiscal deficit but would improve corporate governance and improve people’s ownership of public assets.

The Centre has earned Rs 2,000 crore from the SJVN Ltd issue in 2010-11 and is expected to raise another Rs 15,000 crore from the ongoing Coal India IPO.