Govt to divest in 6 cos by 2010

Set a disinvestment target for financial year 2010 at Rs 1,120 crore.

The government will sell equity in 6-7 state-owned companies over the next 12 months, Finance Secretary Ashok Chawla said today.

“There will be 6-7 companies that will go to market in the next 10-12 months, all may not go in the current fiscal,” Chawla said on the sidelines of an event organised by Corporation Bank.

He did not, however, name the companies and quantify the capital the government expected to raise through this.

The government has set a disinvestment target for the current financial year at Rs 1,120 crore though this has been more than met with the government expected to get over Rs 2,000 crore from sale of 5 per cent equity in power sector major NHPC Ltd. While NHPC recently come out with its initial public offer, Oil India Ltd is expected to go to market next month. The NHPC offer closed last week and is expected to raise around Rs 6,000 crore. NMDC and Coal India are other public sector undertakings (PSUs) that are expected to sell off equities in the coming months.

The finance secretary also added that it would soon approach the Cabinet for amending the provisions of the National Investment Fund (NIF). Under the disinvestment programme, the government plans to retain 51 per cent stake in listed government companies. As a first step, it will dilute stake in those listed companies which have with less than 10 per cent floating equity, either through offloading its equity or through follow-on issues.

Around 15 PSUs had earlier been identified for disinvestment. Railway PSUs Rites and Icron along with NTPC Ltd had conveyed their unwillingness to go for the follow-on issue. Icron and Rites stated that they did not require additional funds while floating equity in NTPC is already above 10 per cent.