Buoyed by this year’s bumper sales and with India’s stock markets at record highs, market participants expect Arun Jaitley to unveil an asset-sale target of between Rs 60,000 crore and Rs 1.2 lakh crore when he unveils the Budget 2018 on February 1. In this list are: Air India, IRCTC, and insurance companies.
India’s disinvestment target for the year 2017-18 is Rs 72,500, of which, as on January 22, Rs 55,560.73 crore mark has been achieved, and with ONGC-HPCL Rs 36,915 crore, the government is set to achieve the goal for the first time. With its stake sale in HPCL, the government’s disinvestment receipt will work out to be at least Rs 91,252.6 crore, PTI reported. The target is understood to have been achieved well before the disinvestment of Air India, IRCTC and several insurance companies, and the government has a case for an increase in the target for the fiscal year 2018-19.
The Budget 2018 may draw a roadmap for the disinvestment target for the next year, and media reports suggest that it is likely to be Rs 1 lakh crore. The government reduced its stake in several PSUs this year, including HUDCO, EIL, NTPC, NALCO and OIL. Two state-owned insurance companies, GIC and New India Assurance were listed on stock exchanges this fiscal, while there are many more left in the list, which may push the disinvestment target to Rs 1 lakh crore.
Investment bankers and economists expect the finance minister, Arun Jaitley, to set an ambitious target for the year beginning on April 1 following strong sales in the current fiscal year to the end of March, Reuters reported. Buoyed by this year’s bumper sales and with India’s stock markets at record highs, market participants expect Arun Jaitley to unveil an asset-sale target of between Rs 60,000 crore and Rs 1.2 lakh crore when he unveils the Budget 2018 on February 1.
“We still have two months left in this fiscal year. If the big ones still expected this year do not happen by March, those would add to the proceeds next year – so I’d look for Rs 1 lakh crore plus next year,” Reuters quoting a banker reported.
There are nearly three-dozen public sector units that are likely to be listed in the fiscal year 2018-19. The government is finalising disinvestment of six firms including Air India and Dredging Corporation of India, while many others including railway PSUs such as IRCTC and IRCON Ltd, Mishra Dhatu Nigam and Mazagon Dock Ltd will hit the markets with their initial and further public offering, the Hindu Business Line reported.
In June last year, the government gave an in-principle nod for strategic disinvestment of Air India. The government is working on the modalities for the stake sale, and also approved a 49% Foreign Direct Investment (FDI). The Union Cabinet also approved the listing of five state-run general insurance companies, of which only two have been materialised so far, and three more are likely to be taken up in the next fiscal year.
Railway PSUs — IRCON, IRFC and IRCTC — are unlikely to get listed in the current fiscal and may be taken up in the next fiscal, while two companies — RITES Ltd and Mishra Dhatu Nigam Ltd — filed draft papers with markets regulator Sebi to float initial public offerings earlier this month. The move comes after another state-run Indian Renewable Energy Development Agency (IREDA) approached the markets regulator last month with its IPO papers.