India Inc Divided On SC Verdict On HPCL

Mumbai, September 16: | Updated: Sep 17 2003, 05:30am hrs
India Inc seems divided on the impact of the Supreme Court verdict on HPCL. While most believe that the disinvestment process may not get stalled, they are looking for a clarification from the government on the issue without further compounding the confusion.

According to Union Petroleum minister Ram Naik, The nodal ministry will first study the judgment and ask for the views of the concerned ministry in this case the petroleum ministry. Based on the ministrys views, the cabinet will meet and decide on approaching the Parliament.

The next session of Parliament is in December. Till then, the disinvestment process will have to be stopped. By then, the government can also study the judgment and decide the future course, Mr Naik added.

According to member of Parliament Kirit Somaiya, After all, divestment is a part of the reforms process and the optimum utilisation of the countrys scarce resources is our main objective. There will be some speed-breakers, but we have to overcome them.

However, Asit Kothari, senior vice-president, research, ASK Raymond James said: After todays Supreme Court decision on HPCL, there is a big question mark as far as the disinvestment of the other PSUs is concerned. Because of the requirement of parliamentary approval, the entire process will be halted, as after Nalco and NFL, HPCL is the third one. The past trend indicates that nothing fruitful is likely to happen on the divestment front and with the elections coming up, the future is uncertain. But as far as the stock markets are concerned there would not be any adverse impact unless the FIIs turn their view negative.

UTI MF president, department of funds management, AK Sridhar said, I dont think that the HPCL decision will have a major impact on the policy of the Government to divest the other public sector units (PSUs). The policy issues are much broader and just because one company will go in for parliamentary approval does not mean that all would follow the same route. So also, I do not see this factor as the only one to impact the stock markets.

Taurus Mutual Fund CEO RK Gupta said: The disinvestment process will continue. The heavy selling in the early trading session was a knee-jerk reaction. Funda-mentals of these oil companies are very strong and one announcement is not going to change everything. The PSU stocks witnessed strong buying at low levels which only confirms this. BSE broker Jagdish Malkani said, Specific to HPCL and BPCL, the nervousness was already reflected on the bourses today.