The government has set a disinvestment target of Rs. 58,425 crore for 2014-15.
The target include Rs. 43,425 crore from selling stake in PSUs and another Rs. 15,000 crore from sale of residual stake in the erstwhile government companies, as per the Budget document.
This is higher than the Rs. 51,925 crore PSU stake sale target estimated in the interim budget presented in February by the UPA government. The government’s disinvestment programme will be aided by Securities Exchange Board of India’s (SEBI’s) new norms, including measures that could force Centre to cap its stake in listed state-owned companies at 75%, leading to Rs. 58,000 crore worth of share sales in three years.
The SEBI Board has recommended to make it mandatory for listed public sector undertakings (PSUs) to pare promoters’ shareholding to 75% within the next three years.
Currently, while all non-PSUs are required to have a minimum 25% public shareholding regardless of their size or market capitalisation, PSUs are required to have a minimum public shareholding of only 10%. There are a total 38 PSU in which the public shareholding is less than 25%. Bringing down the government’s stake in these would mean these companies will need to offload shares worth about Rs. 58,000 crore in all.
Of these, one PSU alone—Coal India Limited—would have to sell shares worth nearly Rs. 37,000 crore, sources pointed out. CIL, Steel Authority of India Limited and Hindustan Zinc Limited are likely to be among the first ones to be off the block in the new government’s disinvestment programme.
The reform measures will likely encourage greater retail investors’ participation in public offerings and offer them a larger slice of shares at a discount, besides aiding the disinvestment programme.
Over the medium term framework, the government plans to raise Rs. 55,000 crore for 2015-16 and 2016-17, the medium term fiscal policy framework appended in the budget documents said.