Govt to incentivise PSU listings

Running short of disinvestment target in the current fiscal, the government will incentivise the unlisted PSUs to come up with initial share offerings in the stock market in 2012-13, sources said.

"The Department of Public Enterprises will encourage listing by PSUs," an official said.

At present, there are about 50 PSUs which are listed and their shares are actively traded in the stock market.

However, about an equal number of the government-owned firms are eligible but unlisted for various reasons.

The government has already decided that unlisted PSUs with no accumulated losses and having earned net profit in three preceding years should come out with Initial Public Offerings (IPOs) even as the state holding would not come below 51%.

One of the options to incentivise the PSUs for IPOs is to put this task in the memorandum of understanding (MoU) which an individual enterprise signs with its administrative ministry.

Under the MoU system, annual targets are set for the PSUs and CEOs get personal appraisal points if the tasks are achieved.

While about 50 PSUs including Hindustan Aeronautics Ltd and Heavy Engineering Corporation Ltd can be listed on stock exchanges but these ones have not opted for the same.

The government had set a target of raising Rs 40,000 crore through stake sale in PSUs in the current fiscal.

With only three months remaining, it has been able to mop up merely Rs 1,145 crore through disinvestment in Power Finance Corporation.

To achieve the mammoth target, the Finance Ministry is working on several methods including share buyback by cash-rich PSUs.

But there is feeling in some departments that offloading government shares in one PSU to the other is not the real disinvestment.