This Article is From Sep 26, 2012

Govt in a hurry, may flag off Rs 30,000 cr divestment process next month

The government will likely kick-start its Rs 30,000 crore divestment process from October-November this year, finance ministry sources said. It has also revived the proposal to divest a 10.82 per cent stake in Steel Authority of India Ltd (SAIL).

An inter-ministerial draft note for the sale of a 9.5 per cent stake in NTPC Ltd has already been circulated. Advisors on the divestment of Hindustan Copper Ltd and Rashtriya Ispat Nigam Limited (RINL) have been appointed. However, the government has yet to mandate advisors for the stake sale in Nalco and MMTC.

On 14 September, the government approved the sale of its minority stakes in four public sector firms—Hindustan Copper, Oil India, MMTC and Nalco—to raise up to Rs 15,000 crore.

Finance Minister P. Chidambaram had last month asked officials to expedite the process of disinvestment so that state-owned companies could hit stock markets in time and help the government achieve its target of raising Rs. 30,000 crore through disinvestment in the current fiscal year.

However, the government has failed to come out with a single public issue in the last five months of this fiscal year.

Raising adequate funds from disinvestment is necessary to control the fiscal deficit, which is facing pressure due to rising food, fuel and fertiliser subsidy bills.

The government had to defer the Rs 2,500-crore initial public offering of RINL, which was supposed to be launched in July, due to the weak stock markets.

In the previous fiscal year, the government managed to raise only Rs 14,000 crore against a disinvestment target of Rs 40,000 crore due to the uncertain investment climate.