The government has set a target to raise Rs 40,000-crore through disinvestments in four public sector companies in the fiscal year 2011-12, disinvestment secretary Sumit Bose said on Monday at the press conference for the opening of the follow-on public offer (FPO) of Power Finance Corporation (PFC).
The PFC FPO is expected to raise Rs 4,430-4,660 crore.
The government will dilute its holdings in Oil & Natural Gas Corporation (ONGC), Steel Authority of India Ltd (SAIL) and Hindustan Copper this fiscal apart from PFC.
“We are taking the disinvestments story forward,” said Sumit Bose. “We will have four public issues this fiscal. We expect to raise Rs 40,000 crore through public issues this fiscal.”
The government had raised Rs 22,400 crore last fiscal through three initial public offerings and three follow-on public offerings.
“The FPO of SAIL will be in June and ONGC will be in July. This will be followed by Hindustan Copper sometime later,” Bose said.The sale of 5% stake in ONGC is expected to raise Rs 13,000 crore for the government.
The government had deferred the follow on offers of ONGC and SAIL from the last fiscal to this fiscal. “This is our 12th public issue after the new disinvestments policy came into being,” Bose said.
The government has a larger plan to sell shares of about 60 public sector companies over the next few years.
The secretary said initial public offering of Rashtriya Ispat Nigam Ltd (RINL) and FPO of NTPC are under discussion.
Power Finance Corporation, a Navaratna financial institution, is issuing 22.9 crore shares with a price band fixed between Rs 193 and Rs 203. A discount of 5% is offered to the employees and retail investors. The issue opens on Tuesday and closes on Friday.
DSP Merrill Lynch Ltd, Goldman Sachs (India) Securities Pvt Ltd, ICICI Securities Ltd and JM Financial Consultants Pvt Ltd are the book running lead managers to the issue.
The issue will constitute 17.4% of the post issue paid-up capital of the company. Currently, the government holds 90% stake in PFC.
“Our cumulative loan disbursement is Rs 3.4 lakh crore and last year we disbursed loans worth Rs 99,600 crore in the last fiscal,” said Satnam Singh, chairman and managing director, PFC.
PFC also plans to foray into banking services and loan syndication.