The current financial year appears set to turn into one of the best years on disinvestment since the process began in 1991-92.
With Oil India Ltd and NTPC stake sales slated for January and February, respectively, the disinvestment amount in 2012-13 would cross Rs 20,000 crore and could reach close to the 2009-10 figure of Rs 23,553 crore, the highest in a financial year till now.
The price for OIL’s offer for sale (OFS) is expected to be decided any time before the stake sale day next week. A source from one of the investment bankers appointed for the NTPC disinvestment said the meeting for fixing the price for the company’s OFS was slated for February 4-5 and the issue was also likely to happen the same week.
If the department of disinvestment (DoD) succeeds in completing the OFS of all companies in the pipeline for the financial year, the government would be able to surpass the Rs 30,000-crore Budget target. It could total Rs 34,000 crore.
Finance minister P Chidambaram indicated to investors in Singapore earlier this week that the government would be meeting the divestment target and Rs 9,000 crore had already been achieved. He said there was a timetable for the rest of the financial year, with NTPC the next one, through which government can garner about Rs 11,000 crore.
Encouraged by the recent rally in the stock market, DoD is trying to push through stake sale in six companies by March-end. The next round would begin with the OIL sale next week. Divestment in Minerals and Metals Trading Corporation (MMTC) and Rashtriya Chemicals and Fertilizers (RCF) disinvestment would be done in March, said a DoD official. Stake sale in National Aluminium (Nalco) and Steel Authority of India (SAIL)will be taken up in the same month. While OIL is expected to fetch around Rs 2,500 crore, the 9.5 per cent divestment in NTPC should get Rs 12,000 crore. The government has already collected about Rs 6,900 crore from divestment in the current financial year.
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In the case of RCF, it plans to disinvest 12.5 per cent paid-up equity share capital comprising 6,89,61,012 shares of a face value of Rs 10 each, of its shareholding of 92.5 per cent, through OFS.
Through the stake sale in Nalco, deferred last year, it intends to disinvest 12.15 per cent from its shareholding of 87.15 per cent.
In MMTC, disinvestment of 9.33 per cent paid-up equity share capital comprising 93.3 million shares of a face value of Rs 1 each out of the government’s shareholding of 99.33 per cent is planned, again through OFS. The Cabinet Committee on Economic Affairs has also approved the proposal for raising additional equity by SAIL to the extent of 10 per cent and disinvestment of 10 per cent through OFS.