PSU blue chips ready to rock and roll in 2016

GN Bureau | December 21, 2015



Government's disinvestment kitty has almost doubled this year and a strong lineup is ready for 2016. The government made over Rs 35,000 crore through PSU share sales, with some help by saviour LIC. Those coming up for sale next year are NTPC, Coal India and ONGC.

At a record high of Rs 35,236 crore ($5.3 billion), the total funds collected by the government through part-sale of its stake in the 'family silver' PSUs during 2015 marks a huge jump from about Rs 18,000 raised in the previous year. The disinvestment proceeds stood at about Rs 22,000 crore in the year 2013.

Targeting at least Rs 50,000 crore of funds from sale of PSU shares in 2016, the government will look for right market conditions and positive global cues to resume its disinvestment drive and collect the much-needed resources to meet the deficit targets.

The trends in the crude and metal prices hold the key as the planned portfolio for the new year largely comprises of commodity stocks.
Disinvestment Secretary Aradhana Johri told a news agency that her department is ready with the 2016 "pipeline" of bluechip stocks like Coal India, ONGC, NTPC, BHEL and NMDC.

"We have brought about changes in the way we do business. We are ready to hit the market at short notices as and when window opens," said Johri.

The department of disinvestment has been pitching hard for cutting down the 'notice period' for launching the share sale in an already-listed PSU stock to just one days, but the markets regulator Sebi has refused to budge on this as it wanted the retail investors to get sufficient time to ready for a share sale offer.

Sebi has agreed to trim down the window from 'two trading days' to 'two banking days' -- a move that has led to many PSU disinvestments taking place on Mondays.

Retail public investors, who were supposed to be the core constituency of the disinvestment exercise, however continue to remain away from most of the offers. The success of many PSU disinvestments continue to hinge on help of the state-run insurance behemoth LIC although, the foreign roadshows by the government helped attract some overseas investors in 2015.

The government is also placing its bets on some strategic disinvestment transactions, but not a single proposal could see light of the day in 2015 while the proposed residual stake sales in HZL, Balco and SUUTI were also taken off the list.

In all, the government sold minority stakes in five PSUs, including Coal India and Indian Oil Corporation, to mop up Rs 35,236 crore in 2015.

This is the highest ever collection in a single calendar year even though the markets were challenging, Johri said.

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