A tepid response from the retail segment for recent follow-on public offerings of central PSUs would not discourage the Government from going ahead with its disinvestment road-map, the Planning Commission today said.
“You have a steady programme of disinvestment. Markets will go up and markets will go down. Some will receive a good retail response, some will not. I think you should have a steady policy,” Planning Commission Deputy Chairman, Montek Singh Ahluwalia, told reporters here.
While response from the retail segment has been tepid, that from institutions has been healthy, Ahluwalia said.
Presenting the Budget, Finance Minister Pranab Mukherjee had increased the revenue target from disinvestment to Rs 40,000-crore in 2010-11 from the targeted Rs 25,000 crore for the current fiscal.
The recent FPOs of Rural Electrification Corporation, National Mineral Development Corporation and National Thermal Power Corporation Limited had received a relatively poor response prompting the state-run entities like LIC and SBI to step in to bail out these issues.
In case of FPO OF REC, the portion reserved for QIBs was subscribed 4.15 times while demand from HNIs and retail investors remained tepid at 74 per cent and 12 per cent, respectively.
Similarly, the NTPC issue also almost drew a blank from retail investors, which analysts attributed to the high pricing of the issue. NTPC had fixed the base price for its offer at Rs 201 a share.
Last month, Revenue Secretary, Sunil Mitra, had said that pricing of the recent NTPC issue was not the reason for a weak retail participation. “We think the pricing (of NTPC issue) was good; don’t think the pricing was high,” he said.
Meanwhile, when asked whether the huge Government borrowing scheduled for the next fiscal (Rs 4.57-trillion gross), would hit the private sector, Ahluwalia said that there was no need to worry about it.
“There is no need for too much worry about Government borrowings next fiscal,” he said.