Retail investors set to get rich pickings of Central PSUs

Shares to be offered at a discount; NTPC, Satluj Jal and REC divestment this fiscal.


Plans ahead

Govt hopes to mop up Rs 8,000 crore from NTPC disinvestment

Disinvestment Dept initiates talks with Ministries to identify cos for divestment


– Ramesh Sharma

Shedding stake: The Disinvestment Secretary, Mr Sunil Mitra, and the Joint Secretary, Ms Minakshi Ghose, at a press conference in the Capital on Friday.

Our Bureau

New Delhi, Nov. 13 The Government is likely to offer public sector shares at a discount to individual investors as part of its disinvestment programme.

The next offering could be NTPC. The Government expects to garner at least Rs 8,000 crore through the sale of an additional 5 per cent of its stake in the power major. The mop up target is three times the Rs 2,700-crore that the Government got in 2004 for sale of a 5.24 per cent stake in NTPC.

The other two PSUs identified for disinvestment this fiscal are Satluj Jal Vidyut Nigam Ltd and Rural Electrification Corporation (REC). "We will complete all the three approved transactions — NTPC, Satluj and REC — during the current fiscal," Mr Sunil Mitra, Secretary, Department of Disinvestment in the Finance Ministry, told reporters here today.

The Cabinet Committee on Economic Affairs (CCEA) had last month approved divestment of a 5 per cent stake in NTPC. After this stake sale, the Government holding in NTPC would come down to 84.5 per cent from the current 89.5 per cent.

In his first interaction with the media after taking charge on August 1, Mr Mitra said that differential pricing to retail investors could be considered for the follow-on-public offerings (FPO) of listed Central public sector enterprises (CPSEs). He highlighted that SEBI, the capital market regulator, has now allowed differential pricing in FPOs. Mr Mitra also did not rule out the introduction of auction process for the qualified institutional buyers (QIB) category.

"Our effort would be to incentivise retail participation in the stake sale process," he said.

PSUs waiting in wings

Mr Mitra said that the Department of Disinvestment has estimated that about 10 listed CPSEs will need to meet the mandatory listing norm of at least 10 per cent public ownership. Based on the financial performance data available up to 2007-08 from the public enterprise survey board reports, the Disinvestment Department estimates that there are 50 unlisted CPSEs with three-year net profit track record that could be eligible to get listed in the stock exchanges.

On November 5, the Centre asked all listed, profitable CPSEs to meet the mandatory listing norm of at least 10 per cent public ownership.

It also asked all unlisted CPSEs with positive networth, no accumulated losses and a net profit track record in the three preceding consecutive years to get listed.

Meanwhile, Mr Mitra also said that the Department of Disinvestment has initiated talks with various ministries including that of Steel, Coal (for Coal India) to identify the CPSEs for disinvestment.

In the case of Steel Ministry, the disinvestment candidates are likely to be NMDC and SAIL. He also said that talks are on with the Telecom Ministry on the matter of BSNL.

"We are in discussions… No specific disinvestment candidate has been finalised other than the three already identified. As of now, it is only our estimate that 10 CPSEs could qualify for the 10 per cent public ownership norm and 50 unlisted CPSEs could get listed," Mr Mitra said.

He said that each disinvestment candidate will be considered on a case-by-case basis and that there was no sectoral approach to the disinvestment programme. So far this fiscal, disinvestment has been carried out in two companies — NHPC and Oil India — which fetched the Centre