PM set to break record | business | Hindustan Times
Today in New Delhi, India
Apr 24, 2017-Monday
New Delhi
  • Humidity
  • Wind

PM set to break record

business Updated: Oct 30, 2009 01:38 IST
HT Correspondent

The United Progressive Alliance (UPA) government has finally got its divestment programme moving and if all goes to plan, it might raise close to 80 per cent of revenues of what various governments had garnered in 18 years by offloading equity in public sector companies.

The announcement of the sale of 5 per cent of equity in National Thermal Power Corporation (NTPC) and 10 per cent in Satluj Jal Vidyut Nigam Limited (SJVNL) last week could well mark the beginning of what could be five years of a significant revenue stream for a government that has embarked on an ambitious expansionary fiscal policy.

Steel major SAIL has received approval for a follow-on public offer to the tune of 20 per cent of its paid up capital, including 10 per cent disinvestment of the government stake that would fetch the government over Rs 8,000 crore.

“Focus would first be on profitable companies listed with less than 10 per cent public shareholding,” said a senior official who did not wish to be identified. “The government would consider sale of a part of its shareholding by riding piggy back on follow-on public offers.”

There are at least 12 listed public sector units where public shareholding is less than 10 per cent. They include companies such as National Mineral Development Corporation (NMDC), MMTC, Neyveli Lignite and Hindustan Copper.

The government is likely to divest 15 per cent stake in NMDC that would fetch Rs 18,000 crore, the official said.

Since the UPA government came to office for the second term this May, two public sector companies --- NHPC and Oil India --- have listed on the bourses. The government has raised Rs 2,012 crore and Rs 2,250 crore respectively by offloading 5 per cent and 10 per cent equity in both the firms through the public offers.

“The disinvestment which the government is looking to take up seriously will help reduce the fiscal deficit. It will also provide autonomy to the companies, that will improve on management and corporate governance,” said Amitabh Chakraborty, president (equity), Religare Enterprises.