Govt plans private lessons for PSUs in investor affairs

NEW DELHI: After successfully managing the disinvestment of six public sector companies, the government is now exploring a proposal aimed at helping PSUs learn from the best practices in investor relations followed by the blue chip companies such as Infosys, Wipro and Airtel.

Disinvestment secretary Sumit Bose told ET the government is working on developing such a programme with SCOPE, the representative body for central public sector companies. “The aim is to create an effective channel of communication with investors in order to ensure that the companies are aligned with the expectations of their investors,” he said. He, however, refused to divulge any details saying that the proposal is still being worked out.

The move comes at a time when the Coal India public offer has been subscribed over 15 times. Foreign institutions alone had put in subscription of over Rs 1,00,000 crore. As per the lead managers, new pension funds from outside US have also subscribed to the issue. The disinvestment list for the current fiscal year include heavy weights such as IOC and ONGC. The government has set a selloff target ofRs 40,000 crore in this fiscal.

According to a senior finance ministry official, the government may invite some blue chip companies to share their best practices and experiences. “These companies have dealt with both domestic and foreign institutions. Besides, companies such as Bharti have recently struck major deals abroad and they can share strategies on how to get investors on board and support the company,” he said. Mr Bose also said that such a programme will help the PSUs in the long run as they would have to evolve and understand and deliver on the expectations of their investors.

Scope chairman UD Choubey confirmed that they are working on developing such a programme and will seek participation from companies and their administrative ministries. “We will help bridge the gap between the investors, the PSUs and their respective administrative ministries,” he said, adding that such a platform will help investors to understand the long-term plans of the company, the government policies and hence increase their confidence.

While the contours of the proposed programme are still being worked out, it is likely to include companies such as NHPC, SJVNL, Coal India and some other PSUs that will soon hit the capital markets with public offers such as Power Grid and Manganese Ore.
Infosys has been ranked among the best companies in the Asia Pacific and China, in the categories of 'investor relations website' , 'financial disclosure procedures' and 'corporate governance practices' in IR Global Rankings 2010, conducted jointly by IR Global Rankings and MZ Consult, a leading investor relations and financial communications firm.

Earlier, as per a joint survey conducted by Interconnected Stock Exchange (ISE) and Investor Relations Society (IRS), fund managers are willing to pay a premium on share prices of those companies which have best investor relation practices in place.