Finance ministry to start disinvestment process after Budget

The finance ministry has asked the Department of Disinvestment (DoD) to be prepared for the stake sale in public sector units (PSUs) soon after the Budget in order to make the most of the bullish sentiment in stock markets.

According to sources, the government in its new Budget is expected to retain the disinvestment target at roughly the same level of Rs 36,925 crore proposed in the interim Budget for 2014-15.

Current market conditions are expected to fetch a good price for PSU stocks that have been held back from sale earlier due to highly volatile conditions in stock markets.

The Sensex has gained 14.5 per cent this fiscal with the PSU index touching a 52-week high of 9,091.04 on June 10.

DoD has identified blue-chip companies, including Coal India, which has a market capitalisation of Rs 2,45,769.74 crore, and Steel Authority of India Limited, currently valued at Rs 40,082.34 crore, for stake sale this fiscal.

The government also plans go ahead with the long-pending sale of its residual stake in Hindustan Zinc Limited (HZL) and Bharat Aluminium Company (Balco), which were already been fast tracked by the erstwhile United Progressive Alliance government. The government proposes to mobilise Rs 15,000 crore by selling the residual stake in HZL and Balco.

Other companies on the DoD list for disinvestment include National Hydroelectric Power Corporation, Rural Electrification Corporation (REC) and Power Finance Corporation (PFC).

While a 10-per cent stake sale in Coal India and Steel Authority of India Limited is on the cards, DoD proposes to sell 11.6-per cent stake in NHPC and 5 per cent. The disinvestment target in the previous fiscal was slashed by about 60 per cent to Rs 16,027 crore from Rs 40,000 crore in the revised estimates.

In association with Mail Today