The government may not have yet kicked off its disinvestment plans for 2013-14, but is planning at least five stake sales in June and July. A senior official belonging to the Department of Disinvestment (DoD) exclusively told Express that two stake sales have been planned in June with ‘two-three’ smaller ones in July.
“Two issues are coming in this month and two-three companies in July. They will be small issues just to meet compliance,” Sangita Choure, Joint Secretary, DoD said. According to norms set by the Securities and Exchange Board of India (SEBI), listed public sector units (PSUs) have to divest around Rs 4,000 crore by August 8 this year. The government has already initiated the stake sale process of National Hydroelectric Power Corporation (NHPC) and National Fertilisers Ltd (NHL) and hopes to fetch Rs 2,400 crore and Rs 172 crore respectively.
High fiscal deficit, a gaping Current Account Deficit (CAD) and need to bring the economy back on track necessitated that the government go down the divestment route. Through disinvestment, the government will be selling off some of its stake in its PSUs.
The off-loading of shares would generate funds which in turn would help to lower government bills. The government has planned to mop up Rs 55,814 crore in the current fiscal which includes ` 40,000 crore through stake sale in PSUs and the remaining through sale of residual stake in companies held through SUUTI and government share in Hindustan Zinc and Balco.
Even though the government wanted to reverse last fiscal’s practice of hitting the market towards the end of the financial year, no stake sale has taken place even as first quarter of 2013-14 is nearing completion. “In March, we did two big issues, SAIL and NALCO. Therefore, legitimately we took a break in April. It’s perfectly okay if we didn’t do anything in April as the markets weren’t too cheerful and we have to take into account the sentiment of markets as well. In May, we were working internally on processes to make meet compliance before August 8,” Choure added.
The government has been consistently missing its disinvestment targets. In 2011-12, as against a target of `40,000 crore, the government managed only Rs 15,622 crore. In 2012-13, as against a target of `30,000 crore, it managed only `23,920 crore. “It’s not right to say that we have missed out target. It (disinvestment) has been good last year and we are optimistic for this year also,” Choure added.
Uncertainty in the global economic clime along with lack of consensus back home have been some of the issues that have dogged the government’s disinvestment plans. A number of the divestment plans in major companies have been delayed due to lack of consensus.
For instance, the coal ministry is against divestment of Coal India. “We have two big stake sales planned for this year, Indian Oil Corporation (IOC) and Coal India and hope that disinvestment will go through.
In case of Coal India, there are issues of buyback and dialogue is going on. Indian oil is on board,” Choure said.
