After brilliant disinvestment year, government sets ball rolling for stake sale in these 2 companies

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Published: August 22, 2018 7:04:04 PM

The government proposes to raise Rs 80,000 crore through disinvestment in the current fiscal. So far it has raised Rs 9,219.91 crore by diluting its stake in Mishra Dhatu Nigam and RITES.

After brilliant disinvestment year, government sets ball rolling for stake sale in these 2 companiesAfter brilliant disinvestment year, government sets ball rolling for stake sale in these 2 companies

The government today set the ball rolling for further selling of its stake in NBCC and HUDCO, in addition to an initial public offering (IPO) of the power sector company NEEPCO. The Department of Investment and Public Asset Management (DIPAM) in the finance ministry has invited separate bids from merchant bankers for the three issues, according to public notices.

The DIPAM has proposed to sell additional 10 per cent stake each in construction major NBCC and housing finance company HUDCO, according to the notices. The government currently holds 73.75 per cent stake in NBCC and 89.81 per cent in HUDCO.

The proposal is to dilute the stake through the Offer for Sale (OFS) route. The 25 per cent disinvestment in the North Eastern Electric Power Corporation (NEEPCO), a 100 per cent government owned company, is proposed through the IPO route.

At current price, 10 per cent stake sale in NBCC could fetch the government around Rs 1,300 crore and Rs 1,100 crore in case of HUDCO. The DIPAM has invited separate bids from merchant bankers for the three disinvestments.
In 2017-18, disinvestment of 10.19 per cent stake in HUDCO had yielded Rs 1,207.35 crore to the government.
In 2012-13 the government came out with an IPO of National Buildings Construction Corporation Limited (NBCC) and diluted 10 per cent stake.

The government in October 2016 had sold 15 per cent stake through an OFS in NBCC for about Rs 2,200 crore.  The government proposes to raise Rs 80,000 crore through disinvestment in the current fiscal. So far it has raised Rs 9,219.91 crore by diluting its stake in Mishra Dhatu Nigam and RITES (both through IPO route) and Bharat 22 ETF (Exchange Trade Fund mechanism).

The government sold 25 per cent stake in Mishra Dhatu Nigam and raised Rs 434.14 crore and Rs 460.51 crore from diluting 12.6 per cent stake in RITES, a railways PSU. The Bharat 22 ETF had fetched Rs 8,325.26 crore to the government. In the last financial year, the government had crossed the Rs 1 lakh crore disinvestment target.

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