Despite a good response to the NTPC stake sale, the disinvestment department is planning to delay the next public issue to March. Sources in the department say the public offer of the power major will be followed by a disinvestment in Nalco in March. A senior official said, ?The ministry is unlikely to bring out any disinvestment offer before Budget now… This means Nalco and MMTC will come in March only.?
The finance ministry is to unveil the Budget on February 28. The department has also indicated that public issue of Steel Authority of India (SAIL) might not come in this fiscal.
The government has so far raised roughly R22,000 crore this fiscal from selling stakes in NTPC, Oil India, NMDC and HCL and NBCC. While OIL helped raise R3,114 crore, the 9.5% disinvestment in NTPC is expected to bring R11,500 crore. The government has already collected about R6,900 crore from divestments earlier in the year.
Encouraged by the recent rally in the stock market, the department is trying to push through a 12.5 % stake sale in Nalco, expected to garner R1,400 crore. This is likely to be followed by a sale in MMTC, where it plans to offload a 9.33% stake that will help raise R800 to R1,000 crore.
The department is also planning to bring out a comparatively smaller offer of a 12.5% stake sale in Rashtriya Chemicals and Fertilizers, estimated to bring R300 crore.
In total, the receipts through stake sale in the current financial year are expected to touch roughly R24,000 crore, much lower than the budgeted target of R30,000 crore.
Disinvestment secretary Ravi Mathur had recently said that the government will manage to raise only R27,000 crore, 10% lower than its target. But clearly that target also looks unachievable now.
Sources say the delay is largely to due a poor valuation of PSU stocks like MMTC and Nalco.
In September last year, several employee unions of the aluminium major had launched street protests objecting to the Union cabinet decision to put Nalco on disinvestment block, fearing such a move will pave the way for pushing the navratna company into private control in future.
At present, the government of India holds 87.15% in Nalco and following the stake dilution it will come down to 75%.
In November last year, the eGoM failed to reach a conclusion due to a dismal performance of the company and had postponed decision to January this year.
In case of MMTC, the valuation remains a big question for the government. Meeting the disinvestment target is critical to bring down the fiscal deficit pegged at 5.3% of the GDP for the current fiscal.
