Govt eyes Rs 1,50,000 cr from stake sale in 35 PSUs

The government is planning to divest stake in 35 public sector companies over the next five years to raise around Rs 1,50,000 crore. The Department of Disinvestment has set a target of raising Rs 40,000 crore this year, of which it has raised over Rs 1,000 crore through stake sale in SJVN Ltd.

SJVN Ltd has been the only public issue from the government in the first three months of the financial year. The big public issues being planned are those of Coal India Ltd (CIL), Steel Authority of India Ltd (SAIL), Bharat Sanchar Nigam Ltd (BSNL) and MMTC. Hindustan Copper, Manganese Ore India Ltd (MOIL) and Engineers India Ltd (EIL) would be among the smaller issues. The Cabinet is likely to approve the sale of 20 per cent in Kolkata-based Hindustan Copper Ltd (HCL) tomorrow. “We have shortlisted 35 companies for divestment and are waiting for the finance ministry’s clearance. It will be a phase-wise divestment spread over five years. The government will raise Rs 1,50,000 crore,” Minister of State for Heavy Industries and Public Sector Enterprises Arun Yadav told reporters here at the first Public Sector Enterprises Summit.

So far, SAIL is the only big issue to get Cabinet approval for disinvestment this year. The government is planning to raise Rs 8,000 crore through dilution of 10 per cent equity in SAIL in two tranches, while the company will raise an additional 10 per cent by issuing fresh shares. Last week, Disinvestment Secretary Sumit Bose had said stake sale in Engineers India was likely to take place by the mid-July.

Among the smaller issues, the government is looking at raising Rs 5,000 crore from Hindustan Copper, Rs 500 crore from stake sale in MOIL and Rs 1,200 crore each from SJVN Ltd and EIL. In the case of Hindustan Copper, the Cabinet is likely to approve the sale of 10 per cent government equity in the company, while raising another 10 per cent from fresh equity. On the back of higher production and better copper prices, the company reported a net profit of Rs 154 crore in 2009-10, following a loss of Rs 10.3 crore in 2008-09.

Last year, the government had raised Rs 23,552 crore by selling stake in five companies, leaving it Rs 1,448 crore short of its Rs 25,000-crore target. NMDC was the biggest issue in 2009-10. The government had mopped up Rs 8,480 crore from NTPC, followed by Rs 2,247 crore from OIL, Rs 2,012 crore from NHPC and Rs 882 crore from REC.