Finance ministry sets the highest ever PSU stake sale target by any government, with an eye on containing FY16 fiscal deficit at 3.6%, as promised
The government plans to raise R60,000-70,000 crore by selling stake in public sector undertakings (PSUs) next fiscal to stick to its promise of achieving 3.6% fiscal deficit target. While the Street is keenly awaiting the stance on disinvestment in the Budget speech on February 28, the FY16 quantum targetted by the finance ministry will be the highest ever by any government, data on Department of Disinvestment (DoD) shows.
The target will comprise selling stake in the PSUs, strategic sale in companies like Hindustan Zinc (HZL) and Balco to Vedanta Resources, as well as selling stake in certain private companies held through the Specified Undertaking of the UTI (SUUTI).
In addition, the government will also sell stake in a handful of the 33-companies that need to comply with Securities and Exchange Board of India (Sebi) minimum public shareholding norms. Under the Sebi rules, all listed companies are required to have at least 25% public shareholding till June 2017 or three years from the date of listing for companies listed after June 2014. The list includes Coal India (4.65%) which could fetch the exchequer close to R11,300 crore.
For the current fiscal, the government had targetted
R58,425 crore through various means, of which R43,425 crore was targetted through stake sale in various government-owned PSUs. So far the government has managed to garner R24,300 crore by selling stake in SAIL and CIL – the largest equity offering in the history of Indian capital markets.
The government has completed all formalities for PFC (R1,800 cr) and REC (R1,550 cr) and is soon expected to launch the deals. The Centre has initiated the process of sale in IOC (R8,200 cr), NMDC (R5,500 cr), BHEL (R3,400 cr), and Nalco (R1,250 cr) among others.
Finance minister Arun Jaitley had recently indicated that the government has lined-up an aggressive disinvestment programme to meet the fiscal deficit target of 4.1% for FY15 and 3.6% for FY16.
“…this is going to be period of great activity as far as disinvestment is concerned. I am not going to give any indication but major disinvestment in the coming months prior to March 31 is going to take place,” Jaitley had said in a TV interview.