Divestment may net Rs 59k cr

Govt confident of market appetite for upcoming issues

The government is set to beat its target of Rs 40,000 crore from divesting stake in public sector companies. The first half of the financial year saw the government raise a little over Rs 2,000 crore from stake sales in Sutluj Jal Vidyut Nigam and Engineers India Ltd. But it will raise nearly Rs 22,000 crore in the current quarter, with the Coal India initial public offering alone mopping up Rs 15,000 crore.

The January-March quarter is expected to generate another Rs 35,000 crore, with the issues of Steel Authority of India, Indian Oil Corporation and Oil & Natural Gas Corporation scheduled. These could enrich the exchequer by a total of around Rs 59,000 crore this financial year.

While refusing to be drawn into speculation on the total mop up, Disinvestment Secretary Sumit Bose told reporters today that the government would like to meet its Rs 40,000-crore target.

On the kind of response that might be expected from the upcoming issues, he said the market had enough appetite and that the government planned to spread out the public issues. He did not think bunching big issues in the fourth quarter of the fiscal would create any problems.

Bose said after Coal India, the next public issue would be that of Power Grid Corporation of India, followed by Manganese Ore India and Shipping Corporation. Hindustan Copper would follow. “By December, we plan to come out with four issues,” he said.

While the government raised a little over Rs 25,000 in 2009-10, it mopped up only around Rs 4,260 crore in the first three quarters of 2009-10 through the public issues of National Hydel Power Corporation and Oil India.

The follow-on offers of Indian Oil, ONGC and SAIL are scheduled for the fourth quarter of the current financial year. The issues are expected to bring in around Rs 20,000 crore, Rs 15,000 crore and Rs 18,000 crore, respectively.

Of this, the government will get around Rs 35,000 crore. Indian Oil has floated requests for proposal for the appointment of merchant bankers. The government is also considering a stake sale in Rashtriya Ispat and MMTC. But these stake sales will only take place next year.