Plans on to list 10 CPSUs in FY12 to raise Rs 40,000 cr

NEW DELHI: The department of disinvestment plans to list as many as 10 central public sector units that have turned profitable to raise the budgeted 40,000 crore from disinvestment in the next fiscal.

"We are looking at around 10 companies," a senior finance ministry official said. "A final decision will be taken after reviewing their overall performance and future prospects."

The department would rather list these firms as follow-on offers of already listed companies are not expected to receive a warm welcome from investors when the markets are choppy.

There are 158 profitable state-run companies, of which only 47 are listed. Among the turnaround companies that can be listed are Bharat Pumps & Compressors Limited, Cement Corporation of India, Heavy Engineering Corporation and MECON Limited.

In an interview with ET earlier this month, disinvestment secretary Sumit Bose had said that the government would also look at smaller issues to unlock the value in these companies and broadbase their ownership.

"We do have some big issues (lined up); but there will be small issues, too, otherwise they will never get listed," he had said.

The government will now prepare a road map for listing these companies in consultation with the department of public enterprises, the nodal agency for all state-run units.

The department will provide a detailed list of these companies and their long-term operational and financial viability.

"It needs to be looked into whether this turnaround is only because of government support or if the company has a plan," the finance ministry official said.

The net profit of all the 217 central public sector units rose by 11% to 92,593 crore in 2009-10, according to data released by the department of public enterprises. These firms had made a net profit of 83,867 crore in the previous year.

"We can look at 5-10% stake sale in these companies, however, much will depend upon the company's financial and the response from investment bankers," the official said.

Investment bankers are of the view that issues of smaller state-run companies will get a decent response even in tough market conditions. "A lot, however, will depend on the pricing of the issue," said Jagannadham Thunuguntla, strategist & head of research at SMC Global Securities.