BSE Building
Indian stock market benchmark indices Sensex and Nifty by more than 1 percent on Monday on renewed hopes of a rate cut by the country's apex bank, RBI. Picture: BSE building, Mumbai.wikimedia

Indian Finance Minister Arun Jaitley, as if taking a cue from weak sentiments prevailing in equity markets in India, has cut the disinvestment target for FY2017 to Rs 36,000 crore from Rs 69,500 crore for the current fiscal.

The State Bank of India, in its update a few days ago, had projected the FY2017 target to be fixed drastically lower from the current year's target. 

"We expect government would keep a realistic disinvestment target of Rs 30,000 crore for FY17," said the bank in its note released Feb. 22.

The shares of most of the public sector undertakings were trading in the red in reaction to the lowered target. The S&P BSE PSU was down 1.42 percent, while the Nifty CPSE had slipped 3 percent at around 2.45 p.m.

The biggest losers on the Nifty CPSE were ONGC (down 9.51 percent), Oil India (down 4 percent) and Bharat Electronics (down 2.29 percent).

On the BSE also, most of the PSU stocks were down, barring IDBI Bank, which was trading higher on account of Jaitley's statement in the budget that the government was willing to bring down its stake to below 50 percent. 

The government has managed to raise only Rs 18,300 crore till the end of this month, including the latest round of 5 percent stake sale in thermal power producer NTPC, which is expected to garner Rs 5,000 crore. 

In a related development, the Modi government has renamed the department of disinvestment (DoD) as "Department of Investment and Public Asset Management (DIPAM)."

Besides, Jaitley also said that a new policy to manage the government's holdings in PSUs has been approved.

"We have to leverage the assets of CPSEs for generation of resources for investment in new projects. We will encourage CPSEs to divest individual assets like land, manufacturing units, etc. to release their asset value for making investment in new projects. The NITI Aayog will identify the CPSEs for strategic sale," he said.

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