The government has rejigged the order of PSU stake sales since companies like SAIL and Coal India?that were expected to tap the market by October?are facing problems in getting the necessary regulatory approvals. With the earlier plans of taking these big-ticket offers to the market by October getting jinxed, the disinvestment department is working on putting in place a new pipeline of public sector companies for disinvestment this fiscal.
According to the new plan, after the follow-on public offer (FPO) of Engineers India Ltd, which will be opened this week with a price band of Rs 270-290, Hindustan Copper FPO will hit the market. The empowered group of ministers headed by finance minister Pranab Mukherjee met here on Sunday to approve the EIL price band.
Incidentally, Hindustan Copper is one of the few PSUs in the country with the stipulated number of independent directors and mandatory audit committees in place. The government is also looking at the possibility of taking Indian Oil Corporation and MMTC to the market in the current financial year itself, to make good any shortfall in disinvestment proceeds that might arise if SAIL?s FPO does not happen this year.
?The follow on offer in the Steel Authority of India is getting postponed indefinitely as the reconstitution of the company?s board is still under way. While we are working on it any definite time frame with in which we will be able to take the company to the market cannot be given,? a senior official at the steel ministry told FE.
While the Coal India officials claim that the preparations are on track to opening the initial public offer of the monolithic mining major in October, the finance ministry officials are apprehensive about the ability of the company to stick to the announced time frame.
?The preparations needed to take a company like Coal India to market are enormous. For instance, opening of Demat accounts for all employees, getting the accounts of the company and all its subsidiaries updated and securing the necessary regulatory approvals are bound to be time-consuming. We will be lucky if the red herring prospectus can be filed by December at the earliest,? said a government official involved in the process. PowerGrid, which got Cabinet approval last week, and Shipping Corporation of India are the other two companies that are expected to tap themarket before December.