Government to decide on Nalco, Bhel and NMDC stake sale today

NEW DELHI: The government is expected to decide on selling stake in three blue chip public sector companies — Nalco, Bhel and NMDC — on Thursday after its move to sell shares in IndianOil and ONGC have run into rough weather in the wake of low oil prices.

The finance ministry has proposed a sale of 10% each in state-run mining firm NMDC and aluminum maker Nalco, while recommending a fresh 5% disinvest in heavy engineering major Bhel. Based on Wednesday’s close on the Bombay Stock Exchange, sale of shares in the three companies is expected to fetch close to Rs 10,000 crore.

While the cabinet is scheduled to discuss the proposals on Thursday, it is not clear whether the share sale will be undertaken during the current financial year or is part of the list of PSUs where the government intends to disinvest its equity next year.

During the current financial year, the government is staring at falling short of the target to raise a record Rs 43,000 crore in addition to selling shares in Balco and Hindistan Zinc as well as those of ITC, L&T and Axis Bank that it holds through Specified Undertaking of UTI. So far this year, it has managed to rake in around Rs 24,500 crore, although there are another 45 days before the end of the financial year.

The finance ministry’s failure to sort out the subsidy sharing mechanism is holding up the sale of 5% stake in ONGC, which can help the government raise over Rs 14,000 crore based on current market price and meet the target. The government needs to rework the subsidy formula as ONGC offers discounts to help state refiners cover a part of their losses from selling diesel and kitchen fuel at governmentcapped rates. This discount has risen from 30% in 2008-09 to 48% in 2013-14.