Roadshows for the disinvestment of Rural Electrification Corporation and Power Finance Corporation, expected to fetch close to R3,200 crore, kicked off on Monday and the response is expected to be fairly encouraging, reports Ankit Doshi in Mumbai. However, the government may again need some support from Life Insurance Corporation (LIC) for the other disinvestments since foreign portfolio investors may not buy into all of them.
While the roadshows for ONGC held in November last year were almost a flop, compelling the government to postpone the issue till the subsidy-sharing formula is in place, even the small SAIL issue of just R1,719.54 crore had to be bailed out by LIC which bought 72% of the issue.
The big one is the disinvestment of Coal India (CIL), which will fetch the government half its target of approximately R43,425 crore. While the miner has its attractions, falling production levels had left analysts cautious on the stock. LIC is understood to have built up a war chest by booking profits on existing investments; to be sure, the insurer has made good money on some of the PSU stocks it had invested in in earlier years.