According to the Finance Minister the deteriorating market has put divestment plans on hold. As per the sources all the divestment plans are kept on hold and will be considered once the market stabilizes. The government may revise their divestment plans for FY12 which was 40000 Cr.
The PSU’s that are in the government’s agenda are Hindustan Aeronautics, ONGC, NBCC and BHEL. Some of the other names are RINL, SAIL and Oil India. There has been a delay in the ONGC FPO and its date will be decided in the 1st week on October.
By the end of March the government was expecting to raise 40000 Cr but they have only raised 1100 Cr by divesting its stake in PFC (Power Finance Corporation).In the last fiscal year the government of India had raised rupees 22763 Cr from the sale of equities in PSU (public sector enterprises) against Rs 40000 Cr target. Last year the government offloaded equity of Engineers India, SJVN, Coal India, Shipping Corporation and Power Grid.
The issue which was planned for this fiscal has been postponed many times because of volatile market conditions and the government realizing that the offer in a bad market will not fetch them the money which they want to mobilize from the divestment process. State run SAIL has written a letter to the DOD (Department of Divestment) regarding its FPO. As per ministry sources it mentions that there is no requirement to raise fresh equity. It has also mentioned that they should not go ahead with the plan.
“Bell the bull says: This year is good for the investors to invest in the upcoming issue of the government PSUs.”