Enthused by the success of 5% stake sale in Power Finance Corporation in a volatile market on Monday, the government would look for opportunities to sneak in stake sales in many more public sector companies in the next six months, disinvestment secretary Aradhana Johri has said.
The government’s 5% stake sale in PFC through offer for sale mechanism was subscribed 4.5 times by retail investors and 1.79 times by institutional investors. Of the total issue size, 20% was reserved for retail investors. Bids worth Rs 3,747 crore were received for shares worth Rs 1,600 crore, which means the entire issue was over-subscribed by 2.33 times.
“Our preparedness is complete. We have to look for windows of opportunities,” Johri said. The government has lined up 20 companies, including Indian Oil, Bharat Petroleum Corporation, NTPC and NMDC, as it tries to raise as much as possible.
It has set an ambitious disinvestment target for FY16 at Rs 69,500 crore, including residual stake sales in private firms and the SUUTI stake sale. Of that, Rs 41,000 crore would be raised via stake sales in PSUs.
“I am confident this year we will do more than any year in the past,” she said, adding that the second tranche of the CPSE-ETF to raise up to Rs 5,000 crore was on track and would hit the market as soon as possible after the market regulator gives its approval.
Johri said the government is taking more steps to increase retail participation in the disinvestment of PSUs.
Things were looking bright for the government to move finally on its residual stake sales in Hindustan Zinc and Balco as the court case pertaining to Hindustan Zinc was coming to its conclusion.
However, Johri said she was “not aware of” any proposal to set up a holding company for state-run oil companies for disinvestment purpose.
The PFC issue was the second PSU disinvestment this year, the first being sale of 5% stake in Rural Electrification in April.
The government has managed to raise only about Rs 3,200 crore so far in FY16. The government could not carry out more share sales due to volatility in the market.
On Monday, the benchmark S&P BSE Sensex fell 1.96% to close at 27,561.38, an over five-week low, amid fears over stricter norms on participatory notes and a Chinese stock rout.