Government eyes stake sale in more PSUs

It may launch a second exchange traded fund and further sell stake in SUUTI

GN Bureau | September 30, 2016


#PSUs   #NMDC   #NALCO   #BHEL   #SUUTI   #UTI  

 The government is looking to sell some of its stake in NMDC, NALCO, BHEL through the offer for sale (OFS) route. According to a news report in moneycontrol.com, the centre may divest through an OFS in companies that bought back government shares, in accordance with its plan to dilute share in public sector undertakings (PSUs). 

The government aims to raise Rs 5,000-7,000 crore in the period of October 2016-March 2017 by divesting in mid-sized companies. It may launch a second exchange traded fund (ETF) and further sell stake in Specified Undertaking of UTI (SUUTI) during October-March. 
 
The government kicked off its divestment drive on a high note when it announced to sell its minority shareholdings in the SUUTI fund in July. But the plan hit a roadblock when it received a tepid response from investment bankers and had to pull back its request for proposal (RFP). It then reissued the RFP, and also increased the number of merchant bankers to six from three to underwrite its stake sale. 
 
SUUTI was formed in 2003 as an extension of the United Trust of India (UTI). It comprises 51 companies - 8 unlisted and the rest listed companies. Through SUUTI, the government holds minority stake in these companies and is planning to divest its shareholding. 
 
The government is mulling to divest through an offer for sale (OFS), a block deal, a bulk deal or just by a regular sale on stock exchanges. Three blue-chip stocks – Axis Bank, ITC and L&T – which contribute to approximately 95 percent of SUUTI’s holdings in value terms, can bring in around Rs 63,000 crore if divested completely. 
 
To reach its divestment target of Rs 56,500 crore for this fiscal, the government has been on the front foot to raise revenue. The government has already put 7 percent of its stake in Hindustan Copper for sale through an OFS, that began on Friday and will help to raise Rs 401 crore. It also plans to sell 10 percent stake in NMDC, for which an overseas roadshow was started on September 5. At current prices, a 10 percent sale in NMDC could earn the government around Rs 4,000 crore.
 

Comments

 

Other News

India will set example of post-Covid-19 economic revival: Modi

India is determined to “set an example” for the rest of the word in the post-pandemic economic revival, prime minister Narendra Modi has said, underling the need to become self-reliant. “There is also a widespread debate on how the economies of various countries, including

3,543 ‘Shramik Special’ trains transport 48 lakh people in 26 days

Close to 48 lakh migrant labourers have been able to reach home from the cities they were working in, as the Indian Railways have run a total of 3,543 “Sharmik Special” trains from May 1. Following the home ministry order regarding the movement by special trains of migrant worker

How Jeevan Raths have helped 52,000 migrants in Maharashtra

Before the novel coronavirus hit it, Mumbai about 10-12 lakh labourers from elsewhere had made it their home. The figure for the state of Maharashtra was another 18-20 lakh. As the pandemic spread and the Maximum City emerged as the worst-hit place in India, all economic activities came to an end, and with

China is practicing attack as the best form of defence

For the rest of the world, it is not easy to understand China when it comes to politics or economics. Under pressure from the international community, it has accepted to open the country for a “comprehensive” probe into the origin of the deadly coronavirus. But it is not clear whether the Asian

Corona warriors to “flush the virus” in Mumbai

Even as humanitarian support is pouring in to help distressed migrants amid Covid-19 pandemic and the lockdown, civil society organizations and NGOs are working for sanitation of community toilets which have become breeding source of virus infection. Every community toilet has 20 seats. Each

How lockdown was used to shore up health infrastructure

India, completing about two months of lockdown to protect against the spread of the Novel Coronavirus, has made good use of the time to improve health infrastructure, the government has said. Countering media reports “about some decisions of the government regarding the lockdown implem



Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter