India Govt plans to divest stake in 75 PSUs

Centre Eyes 30,000Cr Mop-Up From PSU Selloff This Fiscal | Delayed Reforms, Eurozone Crisis Weigh On Growth New Delhi: The government has told international investors that it plans to sell stake in 75 public sector companies (PSUs), including 15 that are proposed to hit the markets during the current fiscal.      During last week's road shows in the Persian Gulf to attract foreign retail investors, the finance ministry said that the proposed stake sale would be in addition to the 50 companies that are already listed on stock exchanges. While no timeframe was provided in the presentation, once the process is completed, nearly half of the 250-odd PSUs would be listed as the government believes that it would improve governance standards. In sectors such as banking and petroleum, the government has already listed all the state-owned firms.      In addition, disinvestment is being used by the government to raise resources for funding its social sector schemes and bridging the fiscal deficit, which is the difference between spending and revenue mopped up.      During the current fiscal, the government is targeting to raise Rs 30,000 crore through stake sales, a majority of which will be initial public offers and follow-on issues by listed blue chips such as Bharat Heavy Electricals (Bhel), Nalco and National Mineral Development Corporation (NMDC).      Besides, there are companies such as Hindustan Copper and Steel Authority (SAIL), where the government wants to sell stake along with a fresh issue of shares by the companies to expand their capital base and fund future expansion.     While the government had last year hoped to mop up Rs 40,000 crore through stake sale, it ended 2011 with just around a third of that amount due to adverse market conditions, with Life Insurance Corporation bailing out the ONGC auction.      While market players believe that this year too the adverse market conditions may impact the government's stake sale programme, the finance ministry is banking on several new tools, including the qualified retail investor window, where foreign retail investors can participate in domestic issued.      Adisinvestment ministry official was part of the road shows in the Gulf, the first stop, which will be followed by a similar exercise in Tokyo, Singapore and Hong Kong. "The response was fantastic. There were several investors, including some sovereign wealth funds, that have shown interest and we expect the first QFI investment in a few weeks," said Thomas Mathew, joint secretary in the finance ministry. Mathews said that the government has told investors that it will meet the disinvestment target for the year.