The government plans to sell stakes in Indian Oil Corp and Engineers India Ltd this month and in Bharat Heavy Electricals Ltd (BHEL) in February as it rushes to meet its disinvestment target of Rs 40,000 crore.
The government also proposes to offload equity in Hindustan Aeronautics Ltd (HAL) in March, Economic Affairs Secretary Arvind Mayaram said in an interview.
"This will be very close to Rs 40,000 crore (target). Also in Exchange Traded Fund (ETF), we are going to float some of the PSU shares," he said.
Although the government had budgeted raising Rs 40,000 crore by way of public sector undertaking (PSU) disinvestment, it has so far managed to garner only Rs 3,000 crore from stake sales in seven PSUs, including Power Grid Corporation of India Ltd, Hindustan Copper, National Fertilisers and MMTC.
As per the road map drawn up by the government, a 10 per cent stake sale in IOC and EIL each is expected to yield Rs 5,000 crore and 500 crore, respectively.
It also proposes to mop up Rs 3,000 crore from a 10 per cent stake sale in HAL and Rs 2,000 crore from a 5 per cent stake sale in BHEL. The other major PSUs on the block include Coal India and RINL.
Disinvestment in companies, including IOC and BHEL, has been delayed because of differences among the Finance and administrative ministries over valuation and timing.
"There is no way to discover what is the best price... If the Sensex was down, we would have considered that it is not a good time," Mayaram said. "If the stock market is doing well – Sensex is pretty high – then there is no reason why anybody should say we will not go to the market." Mayaram said the government will also float some PSU shares through the Central Public Sector Enterprises ETF. The ETF is estimated to have a corpus of Rs 3,000 crore.
The proposed ETF comprising shares of listed CPSEs would serve as an additional mechanism for the government to monetise its shareholdings in those companies.
The ETF, which is expected to reduce volatility in shares of state-owned companies, would comprise 2-3 per cent of the shares of PSUs.