Disinvestment: Finally some light at the end of tunnel
The two earlier issues of bluechip companies – ONGC and HCL – had failed to garner institutional and retail investor interest.
Trying to boost disinvestment, market regulator Sebi introduced the concept of offer for sale (OFS) or auction route in January to facilitate share sale of PSUs and also help achieve the minimum 25 per cent public shareholding norms by June 2013.
Under the OFS route, institutions can put in their bids
over the floor price fixed by the government.
However, the Finance Ministry is now working on more innovative methods, like floating PSU Exchange Traded Fund (ETF) to carry forward the disinvestment drive and has floated a Cabinet note in this regard.
The auction route or offer for sale route (OFS) as allowed by market regulator Sebi saw some technical glitches initially which brought about some confusion regarding the ONGC share sale subscription.
While the government was optimistic about the success of the auction route, the first issue of 2012, ONGC, bombed on the stock exchanges amidst high drama, with the 98 per cent of the issue getting subscribed finally. Of this, Life Insurance Corporation (LIC) bid for the 84 per cent of the issue.
The Parliamentary Standing Committee of Finance, headed by senior BJP leader Yashwant Sinha, criticised the disinvestment programme saying that the government