Cabinet to discuss 10% stake sale In HAL tomorrow

Earlier, the union cabinet had cleared the disinvestment of Nalco, Hindustan Copper and MMTC

The union cabinet is expected to discuss a proposal to divest 10% stake in Bangalore- headquartered Hindustan Aeronautics Limited.

According to a senior official at present government of India holds 100% share in the paid up equity of HAL, which could be brought down to 90 if the union cabinet agrees to the proposal.

Earlier, the union cabinet had cleared the disinvestment of Nalco, Hindustan Copper Ltd and MMTC along with a few more companies in its bid to earn Rs 30,000 revenue from disinvestment of public sector undertakings in the current financial year.

Some officials said a proposal from the ministry of finance to amend the Securities and Exchange Board of India Act 1992 for enlarging the selection of presiding officers for special tribunals could also be considered.

Meanwhile, for MMTC, officials said three merchant bankers are in the race for conducting government stake sale through Offer For Sale (OFS) as part of the disinvestment programme for 2012-13. With this, the government is also trying to start the disinvestment process for the current financial year with Nalco and a meeting of the Empowered Group of Ministers (EGoM) is likely to take up the pricing of shares for the company's OFS in the next few days.

Earlier, the deadline for bids for the selection of merchant bankers and brokers for MMTC was extended thrice within a month in October and the Rashtriya Ispat Nigam limited (RINL) initial public offering (IPO) had also been deferred thrice, indicating hurdles on the disinvestment front. According to finance ministry officials, for both RINL and MMTC, pricing was a major concern.

The government has failed to make any headway on the disinvestment front, despite Finance Minister P Chidambaram stressing the Rs 30,000 crore target for this financial year would be achieved.

Of its shareholding of 99.33% in MMTC, the government is considering disinvesting 9.33% paid-up equity share capital, comprising 9.3 million shares of face value Rs 1 each, in the domestic market, through an OFS.

Besides Nalco and MMTC, the government's list of companies in which the process of stake sale through an OFS has already been initiated by the disinvestment department includes Oil India and NMDC.