Government to Raise ₹40,000 Cr via PSU Stake Sales in 2 Months

The government is looking to raise around Rs 40,000 crore in the next two months to meet its FY15 disinvestment target of Rs 58,425 crore, sources familiar with the matter told The Financial Express.

Fiscal Year 2015 disinvestment target:

Source: FE

The government has cleared Oil and Natural Gas Corp's (ONGC) five percent stake sale and is in the process of appointing merchant bankers by August end. The ONGC stake sale would approximately amount to Rs 17, 350 crore to the exchequer.

Piyush Goyal, minister of state for coal and power, announced that the government has planned to sell 10 percent stake in Coal India Limited (CIL), which would be credited to public account under the head National Investment Fund (NIF).

"Government is proposing to disinvest 10% of GoI's equity in CIL out of its holding of 89.65%," Goyal said in Rajya Sabha on Monday.

The finance ministry raised its disinvestment target for the current fiscal year to Rs 58,425 crore, which includes Rs 43,425 crore from selling stake in PSUs and other Rs 15,000 crore from the sale of shares in government firms.

"The government is trying very hard to push ONGC and CIL stake sales first... Expect these two issues to hit the market after September if things appear favourable," an official told FE.

The government is also looking to raise an additional Rs 1,800 crore by selling 10 percent stake in Steel Authority of India (SAIL) and Rs 2,800 crore from an 11.36 percent stake sale in National Hydroelectric Power (NHPC).

Industrial analysts opined that a sale of stakes of these four companies is crucial to target the fiscal deficit to 4.1 percent.

"PSU issues can be the instrument for reviving the sentiments. It is intriguing why the last government was not keen on giving discounts to anonymous small investors but gave ONGC and Oil India a hefty 10% discount to buy 10% of its stake in Indian Oil," Prithvi Haldea, CMD, Prime Database told FE.