In a PSU news update; after two successful disinvestment moves, the government is all set to revamp its strategy for disinvestment in public sector units in the financial year of 2015-2016 and the focus on stake sales are small units rather than in a few big ticket firms, says sources in the finance ministry.
According to the new strategy, the finance ministry is already working on a list of nearly 12 PSUs which includes IOC, NMDC, BHEL, Nalco, Dredging Corporation, PFC and REC.
The government looks at disinvestment proceeds as a major source of revenue, after tax collection, to finance the fiscal deficit.
The new strategy will be in place for disinvestment in the two months of this fiscal and more dominantly from 2015-16.
The government’s swift in strategy comes after a poor show in PSU stake sales this fiscal after its two big ticket disinvestment plans in Coal India and ONGC failed to materialise. Of the Rs 43,000 crore target, the Centre has till now just raised Rs 1,700 crore from a 5 per cent stake sale in Steel Authority of India Ltd.
The department of disinvestment is lining up stake sales of 5 per cent to 10 per cent in a number of small PSUs, including a 5 per cent disinvestment in DCIL, 10 per cent disinvestment in Nalco, 5 per cent disinvestment in BHEL Ltd, 10 percent disinvestment in Indian Oil Corporation Ltd and a 10 percent disinvestment in NMDC Ltd.
According to an analysis of stakes held by the government in listed PSUs, there are close to 30 such companies where the public holding in less than 25 per cent and Sebi has proposed that the government pares its stake in these companies to 75 per cent or below by 2017.
The department is also working on sale of 10 per cent government equity in SJVN Ltd and MOIL Ltd along with disinvestment in NHPC, Power Finance Corp, Rural Electrification Corp. Approvals are also in place for initial public offers in Hindustan Aeronautics Ltd and RINL.
There are at least seven companies where the government’s stake is 90 per cent and these include MMTC, Hindustan Copper, HMT, National Fertlisers, Neyveli Lignite Corp, State Trading Corp and State Bank of Mysore.
To meet a part of its sell-off target of over Rs 40,000 crore this fiscal, the Centre is also planning to sell stake in some of these PSUs over the next two months with a five percent stake sale in PFC expected over the next few days.