IOC and EIL divestment this month
New Delhi   08-Jan-2014

The Statesman quoted economic affairs secretary Mr Arvind Mayaram as said in an interview that the government plans to sell stakes in Indian Oil Corporation and Engineers India Limited this month and in BHEL in February as it rushes to meet its disinvestment target of INR 40,000 crore. The government also proposes to offload equity in Hindustan Aeronautics Limited in March. He said that “This will be very close to INR 40,000 crore. Also in Exchange Traded Fund, we are going to float some of the PSU shares.”

Although the government had budgeted raising INR 40,000 crore by way of public sector undertaking disinvestment, it has so far managed to garner only INR 3,000 crore from stake sales in seven PSUs, including Power Grid Corporation of India, Hindustan Copper, National Fertilisers and MMTC.

As per the road map drawn up by the government, a 10% stake sale in IOC and EIL each is expected to yield INR 5,000 crore and 500 crore, respectively.

It also proposes to mop up INR 3,000 crore from a 10% stake sale in HAL and INR 2,000 crore from a 5% stake sale in BHEL. The other major PSUs on the block include Coal India and RINL.

Disinvestment in companies, including IOC and BHEL, has been delayed because of differences among the finance and administrative ministries over valuation and timing.

Mr Mayaram said that “There is no way to discover what is the best price. If the Sensex was down, we would have considered that it is not a good time. If the stock market is doing well, Sensex is pretty high then there is no reason why anybody should say we will not go to the market.”

Mr Mayaram said that the government will also float some PSU shares through the Central Public Sector Enterprises ETF. The ETF is estimated to have a corpus of INR 3,000 crore.