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HindustanTimes Sat,23 Aug 2014

Disinvestment target for 2014-15 likely to cross Rs. 60,000 crore

HT Correspondent, Hindustan Times  New Delhi, June 25, 2014
First Published: 23:27 IST(25/6/2014) | Last Updated: 23:31 IST(25/6/2014)

The government will likely set a disinvestment target of more than Rs. 60,000 crore for 2014-15, which it seeks to achieve by selling stakes in state-owned companies.

This will be much higher than Rs. 36,000-crore target set in the Interim Budget.

The capital market regulator Securities and Exchange Board of India had approved sweeping new norms, including measures that could force the government to cap its stake in listed state-owned companies at 75%.

There are a total 38 public sector undertakings, in which the public shareholding is less than 25%. Bringing down the government's stake in these would mean that these companies will need to offload shares worth about Rs. 58,000 crore in all.

Of these, one PSU alone - Coal India Ltd (CIL) - would have to sell shares worth nearly Rs. 37,000 crore, sources said.

CIL, Steel Authority of India Limited and Hindustan Zinc Ltd are likely to be among the first ones to be off the block in the new disinvestment programme.

At present, 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%.

The reform measures will likely encourage greater retail investors' participation in public offerings and offer them a larger slice of shares at a discount.


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