Three public-sector undertakings, including Cochin Shipyard, are likely to file draft red herring prospectus within a week with market regulator Sebi for their initial public offering (IPOs)
Three public-sector undertakings, including Cochin Shipyard, are likely to file draft red herring prospectus within a week with market regulator Sebi for their initial public offering (IPOs), through which the government aims to raise about R3,800 crore, an official said.
The Centre could raise about R350 crore via 10% stake sale in the ship building and maintenance firm’s IPO, the first PSU to be listed after a gap of more than three years, in the March quarter of FY17. It will be followed by listing of the Housing and Urban Development Corporation (Hudco).
The Centre plans to sell 10% in Hudco to raise nearly R1,500 crore by diluting 10% stake in the techno-financial institution engaged in the financing and promotion of housing and urban infrastructure in the country.
While Cochin Shipyard and Hudco listing might happen in the current financial year, the planned 10% government stake sale via IPO of military plane maker Hindustan Aeronautics (HAL) to raise nearly R 2,000 crore, might spill over to early FY18.
As a precursor to the listing, the Centre had raised R4,284 crore by selling back a portion of its stake in HAL back to the company in March, 2016. The move was aimed at improving key financial ratios such as price-to-earnings, to make it more attractive for investors.
The last PSU IPO was in March 2012 when the government sold a 10% stake in National Buildings Construction Corporation to raise R125 crore. Choppy markets and lengthy processes often resulted in shelving of listing of many PSUs.
The planned IPOs are part of the Narendra Modi government’s R36,000-crore revenue estimate from minority stake sales in PSUs in 2016-17.
Another R20,500 crore will be raised from strategic stake sales in PSUs. So far in the current fiscal year, the Centre has managed to raise R23,519 crore through a mix of OFSs, buybacks, SUUti stake sale in L&T, etc. Besides the IPOs, the government plans to roll out offer for sale (OFS) of shares in state-run NMDC, MOIL, Nalco and BEL in January-March 2017 to raise about R12,000 crore in disinvestment revenue, another official said.