Govt to sell PSU stakes when market conditions improve

GN Bureau | December 1, 2015



Government will sell stake in some state-owned companies, especially those in metals business, only when market conditions improve, finance minister Arun Jaitley.

Government has a pipeline of over 20 PSUs for offloading part stake during the current fiscal for which it already has the Cabinet approval. They include, 10 per cent stake sale each in OIL, Nalco, NMDC, and 5 per cent each in NTPC , ONGC, BHEL. Besides, plans are afloat for 10 per cent stake sale in Coal India Ltd.

However, volatile market conditions have dented the prospects of a stake sale, with the recent disinvestments of IOC and PFC facing rough weathers.

But there are concerns that the Rs 69,500 crore disinvestment targets for the current fiscal may be missed.

The government has budgeted to raise Rs 69,500 crore through disinvestment in 2015-16. Of this, Rs 41,000 crore is to come from minority stake sale in PSUs and the remaining Rs 28,500 crore from strategic stake sale.

With eight months of the current fiscal about to be over, the government has been able to sell stake only in four companies PFC, REC, Dredging Corp and IOC to net Rs 12,600 crore.

Although the government has missed its divestment target for five years in a row, the target for the current fiscal, 2015-16, was set at a massive Rs 69,500 crore - 180 per cent higher than the total amount garnered from PSU share sales in the previous fiscal.

"I have already said there are few stocks, especially metal stocks, which are down globally. Therefore, in such circumstances it would not be appropriate to sells such stocks in the market," Jaitley said after a meeting with the heads of public sector banks in New Delhi. “We will sell such stocks after market condition improves," he said.

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