DoD for market sale of equity in oil, power PSUs

NEW DELHI: The public could soon become part owner of mega power and telecom giants like National Thermal Power Corporation and Bharat Sanchar Nigam if te Department of Disinvestment succeeds in making open market sale of government equity in these for massive generation of funds.
The department is eyeing at least seven mega corporations including Indian Oil, Oil and Natural Gas Corporation, National Hydro Power Corporation and Bharat Heavy Electricals for open market sale of 10-20 per cent equity to cash in on the buoyency in the stock markets.
A general concept for this was presented during the meeting of the Cabinet Committee on Disinvestment earlier this week, sources said and linked this to the proposal to create an Asset Management Company for managing government equity in all the PSUs.
Stating that retail marekting of government equity was being resorted to again after a gap of nearly 2-3 years, department sources said that a combination of strategic sale and public offer route would be pursued to keep the market prices of PSUs high and garner maximum value.
Emphasising that no decision was taken yet on which PSUs would be taken up for open market offer route first, sources said that "we would like to take some of the big names from among the PSUs where government has or would like to have majority stake."
"We would select some of these PSUs and start discussions with concerned administrative ministries for public offer of equity," sources said.
They, however, pointed out that public offer was unlikely in any of these PSUs very soon as process for divestment of equity in market for MUL and Nalco has already begun.
Stating that domestic market would not be in position to absorb many domestic issues particularly when likes of MUL and Nalco enter the market, sources said that government would like to keep the market appetite high by way of continuous strategic sale of equity in key PSUs.
A combination of these could help government accrue anywhere between Rs 20,000 crore to Rs 25,000 crore annually, they said pointing to buoyency in PSU scrips in the secondary market.
As such the market capitalisation of all the PSUs has shot up to Rs 1,66,000 crore and it was high time for government to cash on the price upswing.