Sebi proposal can help govt get over Rs 50k-cr via stake sale

This, if the proposal requiring minimum 25% public holding in all listed firms passes muster with the Finance Ministry

The government can rake in more than Rs 50,000 crore through stake sales in about 30 PSUs, if a new Sebi proposal requiring minimum 25% public holding in all listed firms passes muster with the Finance Ministry.

While private sector listed companies are already required to maintain minimum 25% public shareholding, this limit for state-run listed entities currently stands at 10%. Capital markets regulator Sebi has now proposed that the 25% limit be applied to the listed PSUs as well and has written to Finance Ministry regarding the same.

As per an analysis of stakes held by the government in listed PSUs, there are close to 30 such companies where the public holding in less than 25% and Sebi has proposed that the government pares its stake in these companies to 75% or below over the next three years.

At the current market price, the value of additional government stakes in these companies -- that would need to be sold to meet the proposed norms -- stands at about Rs 53,000 crore. The valuation could go further up as these stake sales, if they happen, would take place over a period of three years and the markets are already in a bullish mode.

Sebi Chairman U K Sinha, who met Finance Minister Arun Jaitley last week, has said an increase in public float of listed PSUs would help deepen the markets and bring in parity with the private sector entities. However, a final decision in this regard needs to be taken by the government, he said after meeting Jaitley.

The major PSUs where government holding currently stands at more than 75% include Coal India, SAIL, NHPC, NMDC and SJVN.

Moreover, there are atleast seven companies, where government stake is 90% and these include MMTC, Hindustan Copper, HMT, National Fertlizers, Neyveli Lignite Corp, State Trading Corp and State Bank of Mysore.

At the current valuation, the government can garner over Rs 34,000 crore through sale of shares in Coal India alone, if it brings down its holding from 89.65% to 75%.

The proposal would also help in promoting wider participation from investors and boost government's plan of raising funds through disinvestment.