DoD plans SAIL stake sale in Sept; ONGC, power companies to follow

The government will kick off its big-bang disinvestment drive with 5% stake sale in SAIL in September, followed by ONGC and power sector PSUs like REC, PFC and NHPC.

The Department of Disinvestment would embark on roadshows for SAIL towards the end of this month in countries like Singapore, Hong Kong, US, UK and continental Europe.

"Domestic roadshows are equally important as overseas ones. Roadshows take normally a month to be completed. SAIL is the most prepared company for disinvestment," a government official said.

The Budget 2014-15 proposes to garner Rs 43,425 crore from PSU disinvestment, of which about 30% is expected to come in from 5% or Rs 18,000 crore stake sale in ONGC.

Besides a 10% stake sale in Coal India is also on the table which could fetch about Rs 23,000 crore and will make up for half of the disinvestment target.

The sale of 5% stake or about 20.65 crore shares of SAIL at the current market price of around Rs 85 a piece would fetch the exchequer about Rs 1,800 crore.

The Cabinet had in July 2012 approved a 10.82% stake sale in SAIL. Accordingly, the first tranche of disinvestment of 5.82 percent was completed in March 2013.

Besides, the DoD is in the process of finalising a Cabinet note for a 10.96% stake sale in NHPC and 5% each in PFC and REC.

"We will very soon start with the process of appointing merchant bankers. We expect approval of disinvestment for all the power PSUs to be in place by next month," the official added.

As for Coal India Ltd, the government will have to overcome the resistance of trade unions before going ahead with the disinvestment.

The Cabinet had earlier approved stake sale in Coal India but it could not go through because of opposition from the CIL Trade Unions. CIL had to make up for it by paying a hefty special dividend.