Hindustan Copper is all set to become first public sector undertaking to be divested during current financial year. An Empowered Group of Ministers (EGOM) okayed offloading of 9.59 per cent of the Government’s equity in two tranches on Wednesday.
The first phase of disinvestment will take place on Friday while no date has been fixed for the second phase. The Government will offer 4 per cent in the first phase, while the remaining 5.59 per cent will be made available in the second phase. After both these phases, the Government’s holding will come down to 90 per cent from 99.59 per cent.
Mum over issue price
Meanwhile, the Centre has been keeping mum on the issue price. Mines Minister Dinsha J. Patel said, due to certain legal restrictions, the price could not be announced now but will be done in a day or two. He also explained that disinvestment in two tranches intends to discover the price, as at present, very limited stock is available in the market.
The Cabinet Committee on Economic Affairs, in its meeting on September 14, approved the disinvestment of 9.59 per cent equity of HCL. It did not mention disinvestment in two phases, though it did mandate the use of the auction method which is technically known as ‘Offer-for-sale of shares through stock exchanges.’
Explaining the rationale behind the two-phased sell off process, the Disinvestment Secretary M. Halim Khan said, the Government does want to inundate the market with too many shares.
The Hindustan Copper share went down by 3.86 per cent to close at Rs 239.20 on Wednesday.
The paid-up equity capital of the company, as on March 31, is Rs 462.61 crore. What Next?
3 likely by Jan
The Disinvestment Secretary also informed that the effort will be to complete sell-off in at least three more companies by January. The effort is to complete the process in Oil India Ltd and NMDC by December 20 while for NTPC, the target is January 2013.
The Government has so far approved disinvestment in nine companies while another one (NTPC) is expected on Thursday. However, it has not been able to implement any one of the decisions. The IPO of RINL has been deferred thrice, while offer for sale in NALCO was postponed to January.
Disinvestment is very crucial for keeping the fiscal deficit under control. The Government intends to mobilise Rs 30,000 crore through this measure.
Shishir.Sinha@thehindu.co.in