1. Budget 2016: There is a huge value in PSUs that can be unlocked

Budget 2016: There is a huge value in PSUs that can be unlocked

Even as the government is about to miss the disinvestment revenue target for the seventh year in a row in FY16, disinvestment secretary Neeraj Kumar Gupta...

Published: March 2, 2016 1:13 AM

Even as the government is about to miss the disinvestment revenue target for the seventh year in a row in FY16, disinvestment secretary Neeraj Kumar Gupta says the next year’s target of Rs 56,500 crore is achievable. Gupta tells FE’s Prasanta Sahu that a large basket of companies and the strategic sales mechanism would help. Excerpts:

There are skeptics who say the disinvestment revenue target is too optimistic?

I will make best endeavor to achieve them. The risk is market volatility, which I can not ignore. All disinvestment processes run in the market environment and the realizations depend on market prices. However, the set of companies available to the government for (disinvestment) is huge. There are 235 PSUs, out of which nearly 160 are in profit and only 44 are listed. There is a huge value which can be unlocked. Now, which sectors would be picked up, and when to divest, would depend on market conditions.

Why do you think prospective investors will get attracted to PSUs?

They will see the growth story of the country primarily. PSUs are backed by the government. I am sure after the government securities, this may be the next government backed investment option. The last two offer for sales (OFSs in EIL and NTPC) have been in a down market, but even then they were oversubscribed.

What will be the strategy for next year?

The government is free to take any option availbale (such as OFS, ETF, cross-holding among PSUs) for disinvestment as per the Sebi guidelines and Companies Act. Definitely, this exercise has to be run throughout the year.

How you will take forward the strategic stake sales?

The mechanism and the process for such sales has been put in place on Monday. The NITI Aayog has been given the responsibility to help identify companies for strategic sales. Niti Aayog will take departmental inputs as well as previous disinvestment commission recommendations on strategic stake sales.

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