The Telegraph
Friday , July 11 , 2014
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Ambitious target set for selloffs

Market bound

New Delhi, July 10: The bull run in the stock market, which has caught the attention of retail investors, could spell good news for the government as it plans to divest its stakes in state owned firms and raise Rs 63,425 crore in the current fiscal and another Rs 45,471 crore from spectrum auction.

The target includes 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 like SUUTI, Balco and Hindustan Zinc.

This is higher than the Rs 56,925 crore stake sale target estimated in the interim budget presented in February by the UPA government. The stake sale in revised estimate of 2013-14 was Rs 25,841 crore.

Indications are that a cabinet note has been floated for a 5 per cent stake sale in ONGC, which could fetch about Rs 17,000 crore to the exchequer.

Besides, another 10.96 per cent stake is likely to be on offer for NHPC and 5 per cent each in PFC and REC. The Department of Disinvestment is also looking at a residual stake sale in Hindustan Zinc and Balco.

Also market regulator Sebi’s directive asking all PSUs to adhere to the minimum public shareholding norms of 25 per cent within three years could lead to stake sales in 36 firms that do not currently meet this requirement. This could fetch the government Rs 60,000 crore.

Currently, there are 36 PSUs in which the government holding stands at over 75 per cent. The top 10 PSUs (in terms of value of shares to be offloaded) could help raise more than Rs 54,000 crore for the government.

These include miners Coal India and NMDC, and metal producers, SAIL and Hindustan Copper. CIL alone could fetch the government in excess of Rs 35,000 crore. Most of these stake sales are expected to be via the offer-for-sale (OFS) route, according to some estimates.