The government is likely to target a revenue of about Rs. 50,000 crore from sale of equity in state-owned companies in 2012-13. The stage appears set for raising the pace of the disinvestment programme including big-ticket stake sales in companies such as NTPC, Coal India and National Mineral Development Corporation (NMDC).
“The details of the revenue target from disinvestment in 2012-13 is being finalised, but it is likely to be pegged at higher than last year,” said an official who did not wish to be named.
With the Securities Exchange Board of India (SEBI) approving new rules for private placement of shares to institutional investors as well as the auction of shares to retail investors, the government is banking heavily on disinvestment proceeds to bolster its balance sheet. The government was banking heavily on disinvestment proceeds to bolster its balance and had originally targeted Rs. 40,000 crore revenues for 2011-12. It has, however, raised only Rs. 1,145 crore so far this fiscal.
The government, in its capacity as the promoter of public sector companies, has to dilute its stake to 75% or below by June 2013 through public offering of shares to ensure that public holding in a listed company is at least 25%.
So it has to dilute stake in companies such as NTPC, Coal India, NMDC, Indian Oil Corporation, Oil India and NHPC — stakes ranging from 4% to 24%.
The SEBI board had allowed auctioning of securities through stock exchanges and introduced a new method for institutional placement of stocks. Besides, the auctioning route, a special window can be used by promoter stakeholders to sell at least 1% of the paid-up capital of a company.
Instead of working out an elaborate exercise of follow-on public offers (FPOs), promoters or the government in the case of public sector undertakings (PSUs) will be able to auction off their stake in a quick and simple manner.
It will also ensure better price realisation for the government for many of its listed companies in which it plans to sell stake.