Selloff target to double in FY14

Total revenue pegged at Rs 55,000 cr; a fourth of this to be raised by selling stakes in private firms

The department of disinvestment may be gearing up for a bumper year. For FY14, Finance Minister P Chidambaram has pegged miscellaneous capital receipts at Rs 55,814 crore, nearly doubling the FY13 target of Rs 30,000 crore. The FM, though, chose to keep quiet about this key source of capital receipts in his Budget speech.

Disinvestment of the government's equity holding in public sector units (PSU) forms a major portion of this target, at Rs 40,000 crore. In addition, the government plans to raise Rs 14,000 crore by selling its stake in non-government companies such as Balco and shares held by the Special Undertaking of UTI (SUUTI).

SUUTI holds considerable stakes in companies such as Axis Bank, Larsen & Toubro and ITC. Another Rs 1,814 crore is expected to be raised by the write-back of amounts with asset management companies. This is, by far, the highest disinvestment amount targeted by any finance minister.

The government has so far raised Rs 21,400 crore this financial year and plans to raise Rs 24,000 crore in all, according to the revised estimates in the Budget document. Buoyant capital markets and innovative divestment mechanisms will have to be deployed to achieve the lofty target this year, according to market experts.

The government is planning to launch an exchange-traded fund to offload PSU stakes on a continuous basis.

Companies with high government stake such as Coal India (90 per cent) and NMDC (80 per cent) might be key disinvestment targets in FY14.