The Cabinet Committee on Economic Affairs (CCEA) meet on Friday is likely to see some big ticket decisions on disinvestment in five major public sector undertakings (PSUs).
These companies include OIL India and Hindustan Copper besides others.
“Going by the current market value, the Government is expected to earn Rs 10,000 crore from selling shares in these five PSUs,” a senior Government official told
The Government aims to mobilise Rs 30,000 crore through disinvestment in the current fiscal. However, even after five months of the current fiscal, it is yet to open its account on this front.
Modality not announced
The official also said proposal for CCEA does not mention the modality of disinvestment in four out of five companies. However, in the case of Neyveli Lignite, it has been proposed to use ‘offer for sale through stock exchange.’ CCEA is unlikely to prescribe time frame for the disinvestment.
Disinvestment in a listed public sector company can either be done by follow on public offer (FPO) or the recently introduced offer for sale through stock exchange or auction method. FPO is a time-consuming and expensive method, while auction method is very economical and can be completed in a very short period. ONGC was the first company where auction method was used for disinvestment.
During the current fiscal, the Government did decide to offload its stake in Rashtriya Ispat Nigam and Steel Authority of India. But, the volatile market situation forced the Government not to implement its decision. Still, the Government is hopeful of not just meeting the target, but even exceed it.