The stocks of listed public sector companies that could be up for a stake sale have rallied in the day's trading following the divestment policy announced by the government.
The Cabinet Committee on Economic Affairs (CCEA) has made it mandatory for unlisted PSUs with a positive net worth in the past 3 years to be listed on the bourses and the listed public entitities to maintain their public shareholding at 10%. This could trigger a host of IPOs by companies such as BSNL and Rites, and follow-on public issues by the listed companies such as MMTC and NMDC.
The proceeds from the stake sale would be used for social sector programmes, according to Chidamabaram.
This policy move is likely to boost the presence of PSUs on the bourses and help in reining in the run-away fiscal deficit, which is seen at 6.8% this year.
The PSU index has gained 3% to be the leading sectoral gainer on the BSE. MMTC has zoomed Rs 4,612 or 15% to Rs 34,735 on the BSE., Hindustan Copper strengthened Rs 23 or 10% to Rs 256, NMDC appreciated 10% to Rs 338, National Fertilisers rose 13% to Rs 62 and STC India went up 13% to Rs 350.
RCF has gone up 14% to Rs 75 although the company has denied that divestment was on its agenda and said that funds would be raised through other means.
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