Handique: Slowdown

New Delhi, June 10: The cabinet today deferred a decision on stake sales in state-run Coal India Ltd (CIL) and Hindustan Copper, which together could have fetched the government around Rs 17,000 crore.

“The cabinet didn’t take a decision on the proposed sale of stakes in Hindustan Copper and CIL,” minister of mines B.K. Handique said without giving any reason for the deferment.

Calcutta-based Hindustan Copper was expecting the government to approve its plan for a 20 per cent stake sale to raise up to about Rs 5,000 crore.

Chairman Shakeel Ahmed had said he did not expect any issues with the cabinet approval “as no ministry has opposed it”. The government’s stake in Hindustan Copper — the country’s biggest miner of copper ore — will drop to about 81 per cent after the offer from 99.59 per cent.

The government’s decision to sell 10 per cent in CIL — which is expected to fetch between Rs 12,000 crore and Rs 15,000 crore — was also deferred.

Last week, coal minister Sriprakash Jaiswal had said CIL might postpone its initial public offering to September or October, instead of July-August as planned earlier because of the euro zone crisis.

Investment bankers involved in the stake sale had also advanced similar agreements. Besides, the holiday season would be over in Europe by then and the markets have shed their lethargy.

The government has shortlisted six banks, including Citigroup, Bank of America-Merrill Lynch and Morgan Stanley to manage the CIL issue. The bankers for the Hindustan Copper issue are expected to be finalised next week.

The stake sales in CIL and Hindustan Copper are part of the government plan to divest stakes in over 60 public sector firms over the next five years.

The department of disinvestment has set a target to raise Rs 40,000 crore this year. It has already raised over Rs 1,000 crore through a stake sale in Satluj Jal Vidyut Nigam Ltd.

EIL divestment

Divestment secretary Sumit Bose had recently said the sale of 10 per cent of the government’s equity in Engineers India Ltd (EIL) was likely to happen in the second half of July.

Last year, the government had raised Rs 23,552 crore by selling shares in five companies, missing its Rs 25,000-crore target by Rs 1,448 crore.

The public issue of National Mineral Development Corporation was the biggest in 2009-10.