The government expects to mop up about R22,574 crore from stake sale in four state-run companies, including Oil and Natural Gas Corporation and NMDC, minister of state for finance Jayant Sinha said on Friday.
In a written reply in Lok Sabha, Sinha said a 5% stake sale in ONGC could fetch R13,217 crore while a 10% sale in iron ore miner NMDC could generate R5,038 crore, at current market prices.
The government could get R3,129 crore from a 5% share sale in Bharat Heavy Electricals and R1,190 crore from a 10% stake sale in National Aluminium Company, he said.
The expected receipts from these four companies, for which the Cabinet has already given approval, were based on share prices as of March 16 and after factoring in a discount to retail investors, Sinha said. He did not elaborate on the timing of these share sales.
The government has set a disinvestment revenue target of R69,500 crore in FY16, the highest ever after the government started selling shares in 1991. It expects R41,000 crore from disinvestment of small stakes in a clutch of state-run firms and R28,500 crore from sale of government holdings in private companies, sale-off of loss making public sector firms and strategic divestment in profitable state-run firms.
The disinvestment revenue is critical for the government in FY16 to reduce fiscal deficit to 3.9% of GDP from an estimated 4.1% in FY15, at a time when its finances are constrained due to higher resource allocation to states and likely financial burden on account of salary revision of government employees.
Given that the government has missed disinvestment revenue forecast in the last five years in a row, disinvestment secretary Aradhana Johri said the share sales in identified companies would start from April, the first month of FY16, to make it a success.
Due to delays in coming out with offers for share sales, the government could manage to raise only R24,200 crore as against a target of R58,500 crore in FY15, a shortfall of 59%.