Govt. will not do anything to disturb the market: FM
October, 27th 2010
All set to garner over Rs 15,000 crore from Coal India IPO, the government on Tuesday made it clear that it does not like to over flood the market with PSU issues and sell shares at depressed prices.
"My point on disinvestment is that we will not do anything to disturb the market. We will not like to have a situation where our shares will be sold under-priced," Finance Minister Pranab Mukherjee told Economic Editors' Conference here.
He said the government would bring in more PSU issues as and when the market is in a position to accept. "We gave an indicative target as we have a given in our budget Rs 40,000 crore," Mukherjee said.
The government has so far mopped up Rs 1,062 crore by divesting its stake in Satluj Jal Vidyut Nigam , and Rs 960 crore through Engineers India FPO this fiscal. Besides, it is set to garner over Rs 15,000 crore from Coal India public issue which closed last week. Last fiscal, the government had raised Rs 23,553 crore through stake sale in Oil India, NMDC, REC and NTPC.
In a background note to the conference, the Finance Ministry said the government is likely to dilute its stake in seven more companies this fiscal, including 10 per cent disinvestment in Indian Oil Corporation in January and later in SAIL in February, to meet the target of raising Rs 40,000 crore.
The public issue of PowerGrid is expected in the second week of November and of Manganese Ore India Ltd towards the end of November.
That would be followed by Shipping Corporation in the first week of December, while Hindustan Copper public subscription would open on the second week of December, according to the background note of Finance Ministry for the Economic Editors' Conference that began today. "The department of disinvestment is hopeful of achieving this (Rs 40,000 crore) number," it added.
The new year will begin with the 20 per cent follow on offering (FPO) of IOC, followed by SAIL's disinvestment in February. "The follow-on public offering by way of disinvestment of 10 per cent of paid-up equity capital of the company (IOC) in conjunction with issue of fresh equity of equal size by the company is expected to open for public subscription in January 2011," the not said.
The FPO by way of disinvestment of 5 per cent of paid up capital of SAIL in conjunction with issue of fresh equity of equal size of the company is expected to open for public subscription in February 2011. The stake sale in Oil and Natural Gas Corporation of India is also under consideration for the current financial year, 2010-11.