The government has deferred the proposed disinvestment offer of Hindustan Copper to the later half of the fiscal in the wake of unfavourable market conditions and pressure on margins of metal-based companies from rising cost of input. The company had earlier targeted to hit the market with its offer during the first quarter of current financial year (2011-12).
Big ticket market offers of companies such as SAIL, ONGC and Power Finance Corporation (PFC) are likely to happen over the last two months of the first quarter. The R6,000-crore public offer of PFC has already been given the nod and is likely to hit the market on May 10.
?We are confident about launching the three issues in the first quarter period itself as initial groundwork for all these have already been completed. This will help in completing the issues quickly and at short intervals. But the disinvestment programme for HCL has been deferred again as the company was not too keen for it at this juncture,? a government official told FE.
The air of uncertainty in the disinvestment line up for this fiscal continues as big ticket issues like ONGC is also held up. The finance ministry has Cabinet approval to bring out the issues of PFC, SAIL, ONGC and HCL.
ONGC is expected to hit the market with its R12,000-crore follow-on public offer in June. The share sale was originally planned for March, but was delayed as the company did not meet the Sebi?s listing norm of having an equal number of functional and independent directors on its board.
?The oil ministry has indicated that the issue (of independent directors) will be resolved soon, the finance ministry official said. ?We are hopeful of bringing out ONGC issue around last week of June.?
In case of PFC, the company will infuse 15% fresh equity, while the government will dilute its 5% stake. The government currently holds 89.78% stake in the firm. It had divested 10% through initial public offer (IPO) in 2007.
Besides, the much-awaited R8,000-crore FPO of Steel Authority of India (SAIL) is also set to hit the capital market by the end of next month.
The FPO of SAIL, in which the government holds a little over 85%, has failed to meet repeated deadlines since December due to unfavorable market conditions and problems with merchant bankers. In SAIL, in the first phase, besides raising R4,000 crore by divesting 5% stake, the steel giant would raise fresh equity of the same proportion. In the second phase, it will sell another 10% through FPO.
The government has set a target of R40,000 crore through disinvestment in state-owned firms this fiscal, up from over R22,000 crore mopped up in 2010-11.