Govt okays 12.5% stake sale in Rashtriya Chemicals

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SummaryThe Cabinet on Wednesday approved the sale of its 12.5% stake in Rashtriya Chemicals and Fertilisers.

The Cabinet on Wednesday approved the sale of its 12.5% stake in Rashtriya Chemicals and Fertilisers (RCF). The sale could fetch around R360 crore to the exchequer.

The Centre currently holds 92.5% stake in RCF and the paid-up capital of the company is R551.69 crore. Shares of RCF were trading at Rs 57.75, up 3.77% on the BSE.

The stake sale approval is part of the government's decision to raise R30,000 crore through disinvestment in the current fiscal. The finance ministry has already said that the Centre is taking necessary action to achieve the budgetary target, crucial for its fiscal deficit target. So far in 2012-13, the Centre has raised over R6,900 crore through minority stake sale in PSUs.

The disinvestment department is planning to push through stake sale offers of NTPC, Oil India, MMTC, SAIL and BHEL in the fourth quarter of the current fiscal to meet its budgeted target. “All the divestment issues in the January-March quarter will be through offer for sale or auction route and no initial public offer will be initiated this year,” a senior government official said.

The stake sale of OIL is likely in January followed by NTPC in February.

So far cabinet has given its approval for 10% stake each Rashtriya Ispat Nigam (RINL) and Hindustan Aeronautics.

The CCEA has also approved government's plan to offload 12.15% in Nalco, 10.82% in Sail, 9.50% in NTPC and 9.33% in MMTC. Also, a 5% stake sale in BHEL and another 4.01% in Hindustan Copper is in the pipeline.

Recently, government told Parliament that it has identified ten public sector companies for disinvestment. S S Palanimanickam, minister of state for finance, in a reply to the Rajya Sabha said,”The realisation would depend upon prevailing market conditions and investor interest at the time of actual disinvestment”. Some of these offer will be initiated in the next fiscal.

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