Govt plans follow-on issues in divestment
It is not much tom-tommed, but the footwork is clear. Armed with a stronger political mandate, the government is planning to shortly kickstart the stalled disinvestment programme of central public sector undertakings (CPSUs).business Updated: Jul 15, 2009 21:14 IST
It is not much tom-tommed, but the footwork is clear.
Armed with a stronger political mandate, the government is planning to shortly kickstart the stalled disinvestment programme of central public sector undertakings (CPSUs).
And indications are that follow-on public offers (FPOs) of already listed state-owned firms could form a major part of the plan. These include companies like NTPC, PFC, NMDC and HMT.
There are 214 operational centrally owned public sector companies, of which only 160 are profit making. Of these only 44 are listed in stock exchanges and in 14 of these the government continues to hold more than 85 per cent.
Finance ministry officials have recently held discussions with officials of several ministries to thrash out the contours of a disinvestment programme.
Finance secretary Ashok Chawla on Wednesday said a roadmap for disinvestment was due in three or four weeks. But, as said already, there will be no strategic sales handing over management to private parties.
For profitable PSUs already listed, the minority stake sale will be carried out either in conjunction with a public issue of fresh equity by the PSU or independently by the government through an offer for sale.
Officials said besides follow-on public offers, the government plans to list profitable CPSUs with net worths of over Rs 200 crore and disinvestment of equity would be done through IPOs.
This would effectively mean reverting back to January 2005, when the government decided, in principle, to list large, profitable CPSUs and to selectively sell a minority stake in listed, profitable CPSUs while retaining full management control so as not to disturb the public sector character of the companies.
On Tuesday, finance minister Pranab Mukherjee had said that talks have been initiated with other ministries to identify PSUs where a portion of government equity could be offloaded.
The much-awaited IPOs of NHPC and Oil India Ltd (OIL) could well mark the resumption of the stalled disinvestment