PFC issue launched, SAIL to follow ONGC offer only in July

The government is expected to divest five per cent in its largest company, Oil and Natural Gas Corporation, in the second quarter of the current financial year. The issue is expected to be preceded by the public issue of Steel Authority of India Ltd.

The government had originally targeted the ONGC issue in the last financial year but then postponed it for the first quarter of the current one. “The ONGC public offer will come in July,” disinvestment secretary Sumit Bose told reporters on the sidelines of a conference here.

Bose said his ministry had Cabinet approval for four public issues this year. “We will kick off this year’s disinvestment process with the launch of Power Finance Corporation’s FPO, followed by SAIL in June and the ONGC issue in July,” he said. The timing of the public offer of Hindustan Copper has not been decided yet, as the company is in the process of taking certain investment decisions, he said.

The government is also expected to divest equity in National Buildings Construction Corporation and Rastriya Ispat Nigam in the second half of 2011-12, though Cabinet approval has yet to be taken.

SAIL FPO OPENS
The FPO of PFC opened on Tuesday and will close on Friday. It is expected to raise about Rs 4,700 crore. It comprises a fresh issue of 172.1 million equity shares, besides 57.4 million more being offloaded by the government.

Currently, the government holds 89.78 per cent in PFC. It is divesting five per cent, after an earlier 10 per cent divestment through an initial public offer (IPO) in 2007.

The government has set a target of raising Rs 40,000 crore through disinvestment this year. Last year, the government had raised Rs 22,400 crore through disinvestment, with three IPOs and three FPOs, while the SAIL and ONGC issues were rolled over to this year, as the amount was recovered through auctions of third-generation telecom spectrum, he said.

The government also plans to raise Rs 13,000-crore through sale of five per cent stake in ONGC. The SAIL disinvestment is expected to be carried on in two tranches of five per cent. Along with disinvestment, power financiers will be raising fresh equity of 10 per cent. The second tranche, comprising five per cent disinvestment by the government and five per cent fresh equity, is expected to be launched in the last quarter of 2010-11.