Giant PSUs to go public soon | business | Hindustan Times
Today in New Delhi, India
Jan 22, 2017-Sunday
New Delhi
  • Humidity
  • Wind

Giant PSUs to go public soon

business Updated: Nov 06, 2009 02:32 IST
HT Correspondent
HT Correspondent
Hindustan Times
Highlight Story

The Cabinet on Thursday approved a new plan to sell stakes in public sector companies through small-bite share offers in the market, with a mandatory selling provision that would open the gates for stock market offers by more than 50 companies under the Centre’s control.

This could mean share offers by companies such as Bharat Sanchar Nigam Ltd (BSNL).

<b1>Though no revenue target has been set, if all goes to plan, the government can generate this fiscal year itself more than Rs 40,000 crore through minority stake sales in the companies it owns. That could also help it control budgetary gaps as it helps revive the economy with a spending stimulus.

“All profitable listed central public sector enterprises (CPSEs) should need the mandatory listing of 10 per cent public ownership,” Home Minister P Chidambaram told reporters after the meeting of Cabinet Committee of Economic Affairs.

The government has also decided all unlisted CPSEs that have made profits in the past three years and have a positive net worth (assets greater than liabilities) should get listed on stock exchanges, he said.

These companies would enter the market at an “appropriate time”. Chidambaram said.

Since the United Progressive Alliance government came to office for the second term this May, two public sector companies — NHPC and Oil India — have listed on the bourses through initial public offers.

The government has already approved stake sales in power generation companies NTPC Ltd, Satluj Jal Vidyut Nigam and Rural Electrification Corporation, marking the first steps to kick-start the stalled disinvestment programme. Steel major SAIL is waiting Cabinet approval for a 10 per cent stake sale.

There are nine listed public sector units where public shareholding is less than 10 per cent. They include NMDC, MMTC and Neyveli Lignite.

Besides follow-on public offers of already listed companies, the government plans to piggy-back on fresh offers of unlisted state-owned companies to divest its stakes. This would include Coal India, National Buildings Construction Corporation and BSNL.

Chidambaram said the disinvestment proceeds would be channelled into the National Investment Fund. “The corpus comprising deposits from April 2009 till March 2012 would be available in full for investment as capital expenditure in specific social sector schemes determined by the Planning Commission.”