The Finance Ministry has asked the Department of Disinvestment to complete the groundwork for stake sales in state-owned companies soon after the budget to take advantage of the bull phase in the stock market.
The government is expected to retain the disinvestment target of Rs 36,925 crore proposed in the interim budget for 2014-15 when it presents the final budget next month.
A good realisation from the sale of shares held by the government is needed to keep the fiscal deficit under check.
The benchmark 30-share BSE Sensex has gained 14.5 per cent in this financial year, with the PSU index touching a 52-week high of 9,091.04 on June 10.
"Current market conditions will offer good valuations for most PSUs. We will push for divestment of PSUs post-budget and we are doing due diligence for the same," official sources said.
The DoD has identified blue chip companies including Coal India, which has a market capitalisation of Rs 2,45,769.74 crore, and the Steel Authority of India, currently valued at Rs 40,082.34 crore, for stake sales in this financial year.
The government will also go ahead with the long-pending sale of its residual stake in Hindustan Zinc and Balco.
Other companies that the DoD would look at for disinvestment include NHPC, Rural Electrification Corp and Power Finance Corp.
While a 10 per cent stake sale in Coal India and SAIL is on the cards, the DoD proposes to sell 11.6 per cent stake in NHPC and 5 per cent each in REC and PFC.
The disinvestment plan for this financial year was discussed by the DoD and Finance Minister Arun Jaitley last week and the minister is believed to have asked the department to be ready with the stake-sale proposals.
The disinvestment target in the previous financial year was slashed by about 60 per cent to Rs 16,027 crore from Rs 40,000 crore in the revised estimates.
The government proposes to mobilise Rs 15,000 crore by selling the residual stake in HZL and Balco.