With not more than four selloffs likely to be concluded before the financial year ends in March, the government is likely to miss the R30,000-crore disinvestment target by at least 20%. Official sources privy to the disinvestment schedule said the offers for sale in NTPC and Oil India are only two divestments that are certain this fiscal. These will garner about R14,500 crore at current market prices, taking total 2012-13 disinvestment proceeds to R21,400 crore, including R6,900 crore raised earlier.
With revenues from 2G spectrum auctions too missing expectations, the slip-up in disinvestments means the government’s hopes to bridge the shortfall in budgeted tax revenue mop-up through these non-debt capital receipts may not bear fruit.
Although a proposal to raise money by selling stakes held by government-owned SUUTI in blue-chips like Axis Bank, ITC, and Larsen & Toubro has been under consideration for long, the procedures involved could take several months. Besides, there is no consensus yet on whether to sell these stakes at all, sources said.
The government is also trying to raise R2,500-3,000 crore through stake sales in MMTC and Nalco, though there is little clarity on timing. Even the 10% sale in Engineers India cleared by the Cabinet Committee on Economic Affairs on Thursday may not materialise before March end. The proposed sale of residual stakes in Hindustan Zinc and Balco too were unlikely to materialise this fiscal due to lack of consensus among the mining, finance and law ministries. The government holds 29.5% in HZL and 49% in Balco.
In January, Anil Agarwal-led Vedanta Resources had offered R17,275 crore for government’s remaining stakes in HZL and Balco. A senior official told FE: “The OIL issue is likely in January, followed by NTPC in mid-February.” So far this year, the department of disinvestment has concluded share sale proposals of only NBCC, NMDC and Hindustan Copper.
The government plans to divest 9.5% in NTPC via auction route, reducing its stake to 75%. The Oil India issue will divest another 10%.
The government had earlier identified 10 companies, including Oil India, SAIL, Rashtriya Ispat Nigam and Hindustan Aeronautics for disinvestment. A 5% stake sale in BHEL and 10.82% in SAIL have been pushed to the next fiscal, sources said.