Disinvestment drive gathering pace: Receipts nearing FY19 target; to hit Rs 65,000 crore by Jan-end

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Updated: December 10, 2018 7:38:25 AM

Last year, the Centre’s disinvestment receipt was a record Rs 1 lakh crore including Rs 36,915 crore from sale of its 51% stake in HPCL to ONGC.

Of the transactions by January, the Centre could garner about Rs 12,000 crore from share buybacks by PSUs.

If the transactions already initiated and the plans laid out materialise, the Centre’s disinvestment revenue by January-end may touch Rs 65,000 crore, at a striking distance from the FY19 target of Rs 80,000 crore.

So far this year, the Centre has garnered about Rs 32,998 crore in disinvestment receipts, 77% of which via exchange-traded funds. While another Rs 17,000 crore worth transactions are expected by end-January, about Rs 15,000 crore is assured from the proposed Power Finance Corporation’s purchase of the Centre’s 52.63% stake in Rural Electrification Corporation after Cabinet accorded in-principle nod to the deal on Thursday.

Of the transactions by January, the Centre could garner about Rs 12,000 crore from share buybacks by PSUs.

PSUs going for share buybacks include IOC, Oil India, ONGC, NLC, Cochin Shipyard, BHEL and Coal India. About Rs 5,000 crore is expected from relatively smaller deals such as sale of Centre’s entire stake in Pawan Hans (worth about Rs 1,000 crore) and Dredging Corporation of India (up to Rs 1,000 crore); listing of North Eastern Electric Power Corporation (which may fetch about Rs 1,300 crore) and MSTC; and couple of offers for sale (OFS) may also go through before January-end.

The Centre also has a robust pipeline of OFSs in PSUs such as GIC Re, New India Assurance, BEL, HUDCO, NBCC, etc.

Post-January, in another PSU to PSU deal, the Centre may also sell its 63.79% in hydro power producer SJVN to NTPC. This could fetch Rs 6,600 crore plus a premium. The Himachal Pradesh government, which owns a 26.85% interest in the firm and will retain its stake, has sought assurance that the state’s interest would be protected. “Eventually, the share of coal in power production is going to come down, and keeping long-term sustainability in mind, it makes good sense to have the ownership of hydro power plants of SJVN,” a senior NTPC official told FE.

Achieving the FY19 target, which the Centre has said it would, this year would be a major feat for the government aiming to contain fiscal deficit at the budgeted level of 3.3% for FY19. Last year, the Centre’s disinvestment receipt was a record Rs 1 lakh crore including Rs 36,915 crore from sale of its 51% stake in HPCL to ONGC.

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