It is official now. The Centre will miss the disinvestment target of Rs 40,000 crore that was set for the current fiscal in Budget 2011-12, a top Disinvestment Department official said today.
“There is no need to speculate at this point of time as everybody knows that Rs 40,000-crore (target) is now almost impossible,” Mr Mohammad Haleem Khan, Disinvestment Secretary, told reporters here.
The Centre has so far this fiscal mopped up via divestment only about Rs 1,150 crore. Choppy markets and Euro Zone sovereign debt crisis had adversely impacted foreign investor appetite for equities in 2011. But there is now some recovery going by the gush of portfolio flows coming into the equity markets last month.
Auction method
Meanwhile, an Empowered Group of Ministers (EGoM) today decided that the auction method may be used for all those cases where the Cabinet Committee on Economic Affairs has given its nod for a follow-on-public offering. This decision will open the doors for the Centre to adopt the auction route for divestment in ONGC and other State-owned entities.
The capital market regulator SEBI had on February 1 issued detailed guidelines for the offer of sale of shares by promoters through the stock exchange mechanism.
“The EGoM has taken a decision to exercise the option to go in for new guidelines of the SEBI — both in respect of ONGC and BHEL. We have decided to go in for auctions. Both ONGC and BHEL are under consideration. As for further decisions, EGoM is going to meet shortly again. For all other decisions, the next meeting of EGoM has to be awaited,” Mr Jaipal Reddy, Union Petroleum Minister, told reporters outside North Block today.
He, however, declined to comment on whether the ONGC divestment transaction would happen in the current fiscal.
Indications are that the BHEL transaction may not be put through this fiscal as the concerned administrative ministry feels that the power sector outlook is not bright right now to undertake any divestment.
For both ONGC and BHEL, the Government is looking to sell 5 per cent stake.