100-day challenge: Its a race against time on selloff target

Written by Ankit Doshi | Mumbai | Updated: Dec 19 2014, 14:30pm hrs
With less than five months left in the current financial year, achieving the FY15 disinvestment target of R58,425 crore could be an uphill task for the government.

The Centre needs to raise close to R584.25 crore each day in the balance 100 business days available this fiscal to meet the target, which includes a minimum of R43,425 crore from stake sale in 11 PSUs and an additional R15,000 crore from Hindustan Zinc and Balco.

Investment bankers have recommended that the Department of Disinvestment (DoD) launch the deals in a phased manner, instead of crowding the market, as many private companies as well as PSBs are lining up with their respective issues.

There is no point clogging the market. You may be forced to sell shares at a discount or be at the mercy of one or two big investors to salvage the deal. They (DoD) are well aware that these deals need to be done in a phased manner, said an investment banker with a multinational bank.

They said the 5% stake sale in Oil and Natural Gas Corp (ONGC) worth R17,000-17,500 crore holds the key after last weeks energy reforms, given that the Hindustan Zinc deal is reportedly delayed due to an SC probe, Coal India (CIL) worker union have decided to go on nationwide strike next month to protest against the multi-billion dollar stake sale and the finance ministry has decided against diluting stake in the Specified Undertaking of UTI (Suuti).