The government’s disinvestment kitty is set to gain respectability towards the fag end of the fiscal with the empowered group of ministers (EGoM) on disinvestment headed by Pranab Mukherjee today agreeing in principle for auction of 5% share in the Oil and Natural Gas Corporation (ONGC).
A senior government official told Business Standard that the GoM was now slated to take a decision in the next meeting on floor price for the auction which can fetch government about Rs 12,000 crore.
Minister for petroleum and natural gas S Jaipal Reddy said after the meeting, “The government is considering auction route for ONGC disinvestment. No time line fixed as yet. Empowered Group of Ministers (EGoM) to meet again shortly."
Disinvestment in the Bharat Heavy Electricals Limited (BHEL), however, seems set to take place now in the next financial year.
Heavy industries and public enterprises minister Praful Patel, who is also part of the ministers’ panel, said, "no decision on BHEL disinvestment has been taken. It may happen next fiscal".
Stake sale in ONGC through auction along with preferential allotments of PSU shares to the financial institutions like Life Insuarance Corporation (LIC) is being targeted by the government to reach as close to the Rs 40,000 crore budget target for disinvestment in 2011-12.
It has garnered only Rs 1,144.55 crore through stake sale in Power Finance Corporation in the current financial year.
The target of Rs 40,000 crore, according to disinvestment secretary Mohammad Haleem Khan, "is now almost impossible (to meet)".
He further said that a final picture with regard to raising funds from disinvestment in the current fiscal would emerge after the next meeting of the EGoM.
The government is hopeful that disinvestment in National Building and Construction Corporation (NBCC) will get completed in the current fiscal fetching about Rs 250 crore.
The sale of 5% government stake in ONGC is likely to raise about Rs 12,000 crore through the auction route.
In case of BHEL, the proposal is to offload 10% government stake in the state-owned company to garner around Rs 2,500 crore.
