Government goes slow on share sales, eyes PSU buybacks

NEW DELHI: The government has decided to go slow on fresh share sales in public sector companies due to choppy market conditions and is instead pushing for buybacks in around a dozen companies to meet its disinvestment target of around Rs 80,000 crore. "This is not the right time for follow-on issues or initial public offers, given that the markets are volatile and the rally is thin," said a source. While the planned stake sale in railway PSU Ircon is expected, some of other offers may be put on hold.

Instead, the department of investment and public asset management (Dipam) is looking at share buybacks in companies such as Nalco, Coal India, BHEL, NMDC, NTPC, NHPC and Satluj Jal Vidyut Nigam (SJVNL). While no deadline has been fixed for the buyback programme, the government has sounded out the staterun firms about its plans.

The move also means that plans to get NHPC to buy the Centre's share in SJVNL may have been put on the back burner as there was a view that the ONGC-HPCL model could be replicated in the power sector to tap into the cash pile and also implement the "strategic sale" agenda. Dipam had come up with the buyback plan to bolster its disinvestment receipts in the last few years. So far this year, the government has mopped up over Rs 9,000 crore and has faced several setbacks, including dropping plans for Air India stake sale.