Disinvestment secretary Aradhana Johri admits that the government did not expect a global meltdown on Monday
GN Bureau | August 25, 2015
Disinvestment secretary Aradhana Johri said it was a very difficult day. “Still we are happy to have got the value despite huge volatility,” she said. She should be happy as the government managed to garner Rs.9,379 crore from the sale of 10% of its stake in Indian Oil Corp. Ltd on Monday as domestic institutional investors bailed out the disinvestment while retail buyers stayed away amid a rout on the stock market.
There were no road shows and the plan to sell was unvieled on Friday. The issue didn’t see too much interest from foreign institutional investors.But the majority of the issue was subscribed by domestic institutions. With most investors turning sellers on Monday, the government had to depend on Life Insurance Corp. of India (LIC) to help the Indian Oil issue sail through.
Johri said the government did not expect a global meltdown on Monday. “If the assessment had been that there would be a global meltdown, then naturally you don’t enter the market with that information,” she said.
Asked whether calls were made to LIC and government-owned banks to buy the offer for sale (OFS), Johri said calls were made to all potential investors, including retail investor associations.
Johri said though volatility has increased in recent times, the government will look for opportunities for further divestment. “We have to rethink our strategy. Basically, we have to look at which are the stocks we need to put on the market and where the appetite in the market lies,” she said.
Johri said retail investors have gone by market sentiments and not done real calculations. “They would have still gained given the stock closed at 378 while it was offered at 368 to retail investors after 5% discount,” she said.
Indian Oil shares closed the day at Rs.378.25, down 4.11% on BSE. The floor price for the share sale was set at Rs.387. The share sale was supposed to fetch the government almost Rs.9,400 crore at the floor price.
This is the fourth divestment by the government this fiscal year and the second this month. Earlier, it had divested part of its stakes in Rural Electrification Corp. Ltd (REC), Power Finance Corp. Ltd (PFC) and Dredging Corp. of India Ltd.
On Friday, the government raised Rs.53.4 crore from the divestment of its stake in Dredging Corp., while the PFC stake sale raised Rs.1,600 crore last month and the REC sale raised Rs.1,610 crore in April.
The government is also looking to appoint bankers for divesting a 10% stake in Coal India Ltd, which could fetch it up to Rs.23,000 crore.
Bankers have also been appointed for the sale of stakes in NTPC Ltd, Bharat Electronics Ltd, Engineers India Ltd, National Aluminium Co. Ltd and Hindustan Copper Ltd.
The gross Good & Services Tax (GST) revenue collected in the month of May, 2023 is ₹1,57,090 crore of which CGST is ₹28,411 crore, SGST is ₹35,828 crore, IGST is ₹81,363 crore (including ₹41,772 crore collected on import of goods) and cess is ₹11,489 crore (including ₹1,057 crore collecte
Climate change rising temperature and sea levels are posing new risks for coastal cities. With population growth rate of 1%- 2% in India every year, Mumbai too is growing and is population will double from 20 million to 40 million in the coming years. The city is also at the risk of rising sea level. It ne
Union Minister of State (Independent Charge) for Science and Technology, MoS PMO, Department of Atomic Energy and Department of Space and MoS Personnel, Public Grievances and Pensions, Dr Jitendra Singh on Tuesday interacted with and felicitated the first 20 All India Toppers of IAS/ Civil Services Exam 20
In a major decision, the Government has decided to grant waiver of ISTS charges to Off-Shore Wind Projects and extend the waiver to Green Hydrogen/Green Ammonia. This decision has been taken to facilitate wider execution of offshore wind energy initiatives, to promote the expansion of Green Hydrogen / Gree
Urging use of alternative and cost effective fuels to reduce pollution caused by vehicles, union road transport and highways minister Nitin Gadkari on Thursday said finding cost-effective fuels is the need of the hour and underlined that use of fuels like bio-CNG and green hydrogen help in protecting the e
The foodgrain production of 3305.34 lakh tonnes is estimated in the current agricultural year 2022-23 – higher by 149.18 LMT as compared to the previous year, according to the Third Advance Estimates of production of major crops released by the ministry of agriculture and farmers welfare.