New Delhi, Sept. 19: The government today initiated the PSU divestment process by inviting bids from merchant bankers for a 10 per cent stake sale in Oil India.
The department of disinvestment also invited bids from global merchant bankers, investment bankers, consulting firms and asset management companies for an exchange-traded fund (ETF) to sell the shares of PSUs.
The government has set a divestment target of Rs 30,000 crore in 2012-13.
Although five months have passed in the current fiscal, the government has not been able to come out with even a single issue.
Raising adequate funds from divestment is necessary to keep in check the fiscal deficit, which is under pressure because of rising food, fuel and fertiliser subsidy bills.
On Monday, finance minister P. Chidambaram had expressed confidence that the government would meet the target.
Last week, the government cleared selloffs in four entities — NMDC, MMTC, Oil India and Hindustan Copper — which are estimated to fetch Rs 15,000 crore.
In a statement, the department of divestment said, “The government has decided to divest 10 per cent paid-up equity of Oil India through offer for sale of shares through the stock exchanges.”
The last date for submitting the expressions of interest (EoIs) by merchant bankers and selling brokers is October 4. The government holds a 78.43 per cent stake in the company, which will come down to 68.43 per cent. Oil India’s paid-up capital, as on March 2012, was Rs 601 crore.
Merchant bankers will assist and advise the government on the terms of the offer for sale and also conduct surveys to price the offer.
Besides the market route, the government is also considering exchange-traded funds (ETFs) and buyback of shares by cash-rich public sector companies.
ETFs will allow the government to pool shares of companies in which it wants to sell stakes to create a fund. This will then be divided into smaller units, which will be listed on the stock exchanges.
Chidambaram had met public sector companies last week to discuss their investment plans.
With markets rising, officials said divestment was expected to get a boost.
In 2011-12, the government could raise only Rs 14,000 crore against a target of Rs 40,000 crore.