The government is fast-tracking the proposal to sell 10 per cent each in two public sector companies — Oil India Ltd (OIL) and hydro-power generator NHPC Ltd.

The two companies will also issue 10 per cent of fresh equity perhaps by September-October this year, finance ministry officials told Business Standard.

The two companies are also exploring US listing through an American Depository Receipt (ADR) issue.

The government has asked both companies to finalise their accounts according to US GAAP and prepare an updated balance sheet till June this year. A final decision on this will, however, depend on the health of US markets.

MTNL and Gas Authority of India Ltd are the only state-owned companies listed in the US, after VSNL was divested to the Tata group.

Officials added that a key roadblock in the domestic listing of public sector enterprises — the appointment of independent directors on company boards under clause 49 of the listing agreement of market regulator Sebi — has been resolved. The government had finalised professionals to be appointed independent directors to the boards of both companies.

The listing agreement requires independent directors to account for at least half a company board if the board is headed by an executive chairman. For boards headed by non-executive chairmen, independent directors need to comprise a third of the board.

"Oil India and NHPC are in very advanced stages of fully complying with Clause 49. The IPO process will also begin shortly," officials added. Oil India had a turnover of Rs 6,100 crore and net profit of Rs 1,800 crore and NHPC Rs 3,155 crore and Rs 1,004 crore in 2007-08.

With the Left parties having withdrawn support, the government hopes to push through disinvestment in a number of companies — an issue over which the Left was stalling initiatives. Public offers from OIL and NHPC are expected to test the waters, given the fact that the Indian market has also seen a sharp meltdown in the recent past.

As all state-owned firms are not fully compliant with Clause 49 and other regulatory requirements, there may not be any more public offers in the next two quarters.

"There are so many procedural issues that may arise in the process. So we must have time till December to take care of any mid-course corrections," officials added.

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