With a view to persuade more foreign investors to buy into Indian stocks, the department of disinvestment (DoD) will be soon be organising road shows in Singapore, Hong Kong and the Gulf countries.
Mohd Haleem Khan, disinvestment secretary said, ?we will hold non-deal road shows to explain the new changes been made in the offer for sale (OFS) and institutional placement (IPP) route to the foreign investors.? The OFS and IPP routes make it easier for FIIs to buy into equities and so the department hopes to garner higher subscriptions.
The auction of ONGC shares conducted in February this year found, when 5% of the company’s equity was put on sale, few takers and had to be bailed out by the Life Insurance Corporation, the state-owned life insurer. To ensure that future sales of shares attract better interest the government is engaging with investors together with officials from the stock exchanges as also the Securities and Exchange Board of India (Sebi).
On June 27, Sebi eased rules for OFS and IPP by cutting down the 12-week time gap between two such offers to two weeks. That will help companies offload shares in smaller tranches putting less pressure on the stock price. Further, the market regulator also said that the indicative price would be displayed during the last one hour of the close of bidding session irrespective of the book being built.
?We are hopeful of strong investor participation going by the positive response we received from the Gulf countries in the recently conducted road shows by department of economic affairs,? Khan added. During the road shows conducted to generate interest from Qualified Foreign Investors (QFI), the finance ministry indicated that it proposed to sell stakes in 75 public sector companies, of which 15 could hit the markets this year. Should the government succeed in its aim to sell stakes in many of the unlisted PSUs, nearly half the 250-odd PSUs would be listed.
The government is hoping to sell a 10% stake sale in RINL as also stakes in BHEL, Hindustan Copper, SAIL, NMDC, NHPC, MOIL and OIL to mop up R30,000 crore this year. Last year it raised just R13,894 crore against a target of R40,000 crore.
