Disinvestment secretary Ravi Mathur is tasked with ensuring that PSU stake sales happen smoothly at a time when the finance ministry could struggle to meet its growth target of 16.9% for net tax revenue and is relying more on non-tax including non-debt capital receipts. In an interview with FE’s Arup Roychoudhury, Mathur expressed confidence that the disinvestment target of R58,425 crore would be achieved. He also said the Centre is drawing up a roadmap to divest some additional companies this year in order to meet Sebi’s minimum public shareholding norms. Excerpts:

What is your take on the targets set for disinvestment this fiscal? In FY14, the PSU stake sale target was R40,000 crore, out of which only R16,027 crore was achieved. How will the department ensure that there isn’t such a big lag between budgeted and revised estimates this year?

As far as the department of disinvestment is concerned, the target is R58,425 crore, out of which R43,400 crore is for disinvestment,and R15,000 crore is for HZL-Balco and we are gearing up to meet these targets. Last year we could not achieve the target because of the circumstances prevailing at that time. I don’t want to go into that. But definitely, whatever we achieved and whatever the ways we divested companies, through follow-on public offerings, or through buybacks or through cross-holdings, these are all methods approved by the cabinet committee on economic affairs (CCEA).

So within the ambit of all the approvals that we have for the methods of divestment we went through that. Because of certain situations, one or two issues could not go through, that resulted in our not achieving the target. As far as we are concerned, we will try our best to see that the targets are achieved.

Your two big ticket stake sales for FY15 involve ONGC and Coal India. While Coal India’s disinvestment ran into union trouble last fiscal, ONGC has reportedly asked for gas pricing issues to be solved before any sale happens. How will you ensure that these two go through?

As of now we have CCEA approvals only for certain stake sales, which are Hindustan Aeronautics, RINL, SAIL, and the residual sale in Hindustan Zinc (HZL) and Balco. Other approvals are yet to come. We have to go to CCEA to seek other approvals. We will send notes to CCEA for these pending approvals as soon as possible. Before going to CCEA, we go for inter-ministerial consultations. We get comments from administrative ministries and other ministries and departments also. And once the comments are obtained by us, we go to the CCEA with those comments. And once the CCEA approves, we will go for the stake sale.

What is the roadmap for the companies you have already received approvals for?

HAL and RINL will be initial public offerings. I can’t say when exactly will they go to the market. They will go when all the administrative as well as regulatory approvals are in place. For HZL and Balco, we have finished the appointment process of the valuers. Once the valuation is complete then we will go to markets. For the others, merchant bankers have been appointed. We are in discussions with them as to when to take them to the market. For the IPOs, we have to file certain documents with the Securities and Exchange Board of India (SEBI), including the draft offer document and the offer document. We have to seek SEBI’s approval on those documents, only then can we go public with these companies. We will file these documents soon.

Apart from the 11 companies in this year’s plan, is it likely that you will add more companies to meet SEBI’s minimum public shareholding norms? Especially companies in which the Centre has 80-85% stake.

SEBI has kept the minimum public shareholding in listed CPSEs at 25%. We have not received the go-ahead as yet. Once we receive that, definitely we have three years to meet that norm, and we are in the process of preparing an action plan to meet the norms. We have to do it in the next three years, so it is not as if everything has to be done this year. Some may be added for this fiscal, some for the next fiscal, and the others for the year after that.

In the case of HZL-Balco, HZL is listed and the way to divest that stake is clear. What about Balco, which is unlisted? Have you written to SEBI asking their opinion on Balco?

We have written to SEBI (in case of Balco). I will take up this matter with them again, because as per the CCEA approval, it has to be done in the open market. That is what the approval says specifically. On what is the best way to divest an unlisted company, at the moment I have no comments because I have not dealt with an unlisted company yet.

Have you discussed with the Rail Board or the Rail ministry the possibility of offloading stake in some unlisted rail infrastructure companies like IRCON, IRFC, IRCTC, and RailTel through IPOs?

We had opened a dialogue with railways to divest some unlisted companies. But that is at a very early stage. We will see where we are headed once we get comments from them.

All policymakers have expressed confidence in the bull market and said that the disinvestment targets are likely to be exceeded. But is there a concern that the stake sales need to happen before any end in the bull run, for any number of reasons?

I can only talk about market conditions as at present. Earlier, EGoMs used to decide on time and quantum of disinvestment. Whatever the new mechanism comes into place, that

will decide on these issues. A decision will be taken accordingly.