Disinvestment goes off target

Click on graphic

PowerGrid's nearly Rs 7,000-crore follow-on public offering (FPO) is expected to open in the first week of December. If the issue goes through successfully, it will add about Rs 1,600 crore to the government's exchequer and the remaining will go to the company, which is issuing over 600 million fresh shares.

Including PowerGrid and NHPC, whose Rs 2,300-crore buyback programme will begin later this week, less than Rs 5,300 crore will go to the exchequer through disinvestment so far this financial year. That's just a fraction of the disinvestment target of Rs 40,000 crore. Over 85 per cent of the disinvestment target will have to be met in the remaining four months of the financial year. Although the government has lined up big ticket disinvestments such as those of Coal India and Indian Oil Corporation, meeting the target could still be a tough ask. Market experts say investors are likely to remain cautious ahead of the general elections and, hence, appetite for the share sales could remain subdued.