Selloff plan set to be ready by next week

NEW DELHI: The government is likely to announce the blueprint for selling its stake in state-owned companies in the first week of October. The disinvestment department has already floated a note on this blueprint, which will be personally reviewed by Prime Minister Manmohan Singh before the announcement is made.

According to a senior official in the disinvestment department, finance minister Pranab Mukherjee will be holding a meeting, where the note on the selloff programme is expected to get final stamp of approval with the disinvestment secretary and other officials in charge of making the selloff road map by Thursday. But before putting the road map and detailed policy in public domain, the finance minister will brief the prime minister on the issue.

According to the official, who did not wish to be named, this briefing is expected to happen before October 5. The policy is expected to suggest how the government will eventually bring down its stake in public sector companies to 75% over a period of time. ���The disinvestment process will only be done in a phased manner. One initial public offering or follow-on public offering every month is something that we might be able to do if the market sentiment remains strong. But the road map will not be giving any specific timeframes,��� said the official.

The Planning Commission and top officials in the finance ministry have been batting for a bold and clear programme for disinvestment. ���In our view, in 2010-11 and 2011-12, a bold and clear programme of disinvestment would help to meet the shortages in resources for Plan expenditure,��� Planning Commission deputy chairman Montek Singh Ahluwalia pointed out at a recent meeting chaired by the prime minister.

Finance secretary Ashok Chawla had said in mid-August that there would be divestment in at least seven PSUs within the next one year and added that the road map can be expected in the first half of September. But the announcement of the road map got delayed as the discussions with various administrative ministries hit roadblocks.

Prominent state-owned companies such as National Thermal Power (NTPC), Rural Electrification (REC), National Mineral Development (NMDC), Steel Authority of India (SAIL) and Rashtriya Ispat Nigam (RINL) are among the companies expected to figure in the final list, given their pressing need for capital. Though the IPOs for Oil India and NHPC were received well by the markets, no other IPO is in sight as no other PSU has filed its offer document so far.

NHPC is currently trading below its offer price of Rs 36 while Oil India is yet to be listed on the bourses.
anto.antony@timesgroup.com