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New Delhi, Feb. 28: The government has set an ambitious and highest-ever divestment target of Rs 55,814 crore during fiscal 2013-14, which is 132 per cent more than the revised sum set for the current fiscal.
It is likely to sell the residual stake in Hindustan Zinc and shares held by SUUTI to meet the target.
SUUTI was created vide the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 as the successor of Unit Trust of India (UTI). It has been wound up and is succeeded by a new company — National Financial Holdings Company Limited (NFHCL) — which is wholly owned by the government.
The government has residual stake of 29.53 per cent in Hindustan Zinc and through SUUTI, created in 2002, it owns 11.54 per cent in ITC, 23.6 per cent in Axis Bank and 8.3 per cent in L&T.
According to some estimates, residual stake sale of Hindustan Zinc itself could enable the government to meet the Rs 14,000-crore target to be raised by selling stake in non-government organisations. It could exceed the budgeted target if it off-loaded stakes held by SUUTI in blue chip firms.
Finance Minister P. Chidambaram has set a target of getting Rs 40,000 crore by selling government stakes and plans to raise additional Rs 14,000 crore by selling stakes in non-government companies such as Hindustan Zinc and SUUTI. It expects to raise Rs 1,814 crore through write back of amounts with AMC.
“It is an ambitious target, but if stake sale are timed well and priced rightly, the numbers are not something which cannot be achieved. Stake sale is the best way to raise revenue with low tax collection estimate,” Anis Chakravarty, analyst with Deloitte, said.
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