Inflation-hit market sentiment not prudent for floats
IPOs of Nuclear Power Corporation, Cotton Corporation of India, RINL, Ircon, Railtel and IRFC would hit the D-Street from October onwards. Gainers & Losers
By Niranjan Bharati & Rajat Guha, TNN |
NEW DELHI: The government has decided to hold back initial public offering (IPOs) of public sector companies for the time being. Since high inflation is affecting stock market sentiment, it is felt the right time to tap the market may be the post-monsoon period.
As a result, IPOs of Nuclear Power Corporation (NPCIL), Cotton Corporation of India (CCI), RINL, Ircon, Railtel and Indian Railway Financial Corporation (IRFC) would hit the D-Street from October onwards. Investors��� appetite might be better during the festival season, officials feel.
���It would not be prudent for the government to launch IPOs of PSUs at a time when inflation is above 8%. Investors usually shy away from fresh investments when inflation is very high,��� a senior official in the department of disinvestment (DoD) said.
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The government is planning phased disinvestment in about two dozen unlisted profitable companies.
The DoD has started due diligence for companies such as ITPO, RINL, Pawan Hans Helicopters and Telecommunications Consultants (India) for selling 5-10% stake. The stake sale is in line with the views expressed in Economic Survey 2007-08.
All PSUs having net worth of over Rs 200 crore and earning profits for the last three years are being considered for listing. Other financial aspects are also being considered.
Sources said the government was examining the option of issuing fresh equity in some PSUs. In other cases, it would be a mix of 5-10% dilution in government stake and issue of fresh equity. The government adopted this route during power major NTPC���s IPO in 2004.
Hindustan Newsprint, Hindustan Paper, Narmada Hydroelectric Power Corporation, Satluj Jal Vidyut Nigam, Central Coalfields, Coal India, Mahanadi Coalfields, FCI, Aravali Gypsum and Mineral (India), Uranium Corporation, Hindustan Aeronautics, Cochin Shipyard, Goa Shipyard and Mazgaon Dock are the other companies that may be listed on stock exchanges.
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