Finance Minister Pranab Mukherjee sticks to target, fuelling talks of Plan B for selloffs

NEW DELHI: Finance Minister Pranab Mukherjee has said that the government will stick to its disinvestment target of Rs 40,000 crore in this fiscal, raising the prospects of government pushing ahead with stake sales through alternative routes such as buy-back and strategic auctions.

"I am not revising it (the target) right now. We have fixed the target and we will try to achieve it, but it depends on many other situations, particularly the economic health conditions," he said on Friday releasing a White Paper by ICICI Securities on PSU Divestments.

The government has only been able to raise 1,145 crore through stake sale in Power Finance Corporation (PFC). Follow-on public offers of companies such as Steel Authority of India, or Sail, and ONGC have been deferred due to volatile market conditions. "All these aspects have to be taken into account and the government will take a decision at the appropriate time," said Mukherjee.

Chanda Kochhar, MD & CEO, ICICI Bank said listing makes companies agile, drives improvement in management and gives greater market orientation to state-run companies.

The cabinet has so far approved stake sale in five companies which include ONGC, BHEL, Hindustan Copper, Steel Authority of India and construction company NBCC.

Department of disinvestment, the disinvestment arm of the finance ministry has also lined up public offerings of Hindustan Aeronautics Ltd for which merchant bankers have already been appointed.

Disinvestment Secretary Mohammad Haleem Khan said that the government is also moving ahead with proposal to disinvestment in oil sector company OIL India and gas major GAIL. "Correspondence was going on for last six months... We got Petroleum Ministry's in-principle approval on Thursday for disinvestment in OIL. We have to work out the details," he said.