Eager to meet the Rs 40,000-crore revenue target from disinvestment, Prime Minister Manmohan Singh today asked ministries of Coal and Heavy Industries to explore options like share buyback and special dividend to meet the budget estimate.
Coal Minister Sriprakash Jaiswal and Heavy Industries Minister Praful Patel met the Prime Minister to iron out differences over disinvestment of Coal India Ltd (CIL) and Bharat Heavy Electricals Ltd (BHEL).
"BHEL and Coal India have been asked to come back with various options. These options are buyback, dividend payments, disinvestment," Finance Minister P Chidambaram, who also attended the meeting, said.
"Ministry of Heavy Industries, Coal Ministry (has been asked) to work out the best option for raising proceeds as alternative to disinvestment. The money has to be raised through these options," he said.
The government has budgeted to raise Rs 40,000 crore from minority stake sale in PSUs in the current fiscal. With eight months of the fiscal already over, it has managed to garner only over Rs 1,325 crore through stake sale in six PSUs.
According to a top government functionary, it was a review meeting wherein disinvestment plans for PSUs, including BHEL and CIL, were discussed.
"Their (all ministries) view was that the current market conditions are not favourable," the official said
After the meeting, Jaiswal said: "Discussions are under way (on disinvestment of Coal India) and no decision was taken."
The stake sale of Coal India (CIL) has been hanging fire for long due to opposition from trade unions.
Besides, BEHL disinvestment is also facing roadblocks of unfavourable market conditions as the company's share price has taken a beating since its disinvestment was approved in 2011.
The government had originally planned to divest 10 per cent in CIL, but after stiff opposition from unions, it lowered it to 5 per cent or 31.58 crore shares. At the current market price of Rs 274.30 apiece, CIL stake sale could fetch over Rs 8,600 crore.
The government currently holds 90 per cent stake in CIL.
Besides, by selling 5 per cent stake or 8.28 crore BHEL shares at the current market price of Rs 158.40, the exchequer could reap in over Rs 1,300 crore.
In addition to disinvestment, the government is also looking at selling residual stake in Hindustan Zinc Ltd (HZL) and Balco.
The government, which currently holds 29.5 per cent stake in HZL and 49 per cent stake in Balco, is looking