Move to list six PSUs

Around six profit-making PSUs are likely to hit the market in 2010-11, with the finance ministry setting a revenue target of Rs 40,000 crore from divestment.

“It could be four to six PSUs that would be listed, apart from a few follow-on offers this fiscal,” sources in the finance ministry said.

The sources said talks with the respective ministries overseeing the state-owned firms were at an advance stage, and a decision could be taken in the next two months.

Standing in the listing queue are Bharat Sanchar Nigam Ltd, Coal India Ltd, Rail India Technical and Economic Services, Cochin Shipyard, Telecommunications Consultants India and Manganese Ore India Ltd.

These firms meet the government’s criterion for listing entities that have made profits in the last three years, the officials said.

“This year, if we can put in Rs 25,000 crore (through stake sale), next year’s (budget target of) Rs 40,000 crore is modest. There need not be any serious backlash from employees or other stakeholders in the divestment process because it is a very marginal listing process. I don’t anticipate any problem on this,” revenue secretary Sunil Mitra has said.

Sources said the ministry was also considering a follow-on offer for two to three listed firms during the next fiscal.

This would be in addition to the follow-on offer of Engineers India Ltd, which is likely to hit the market in the July-September quarter.

As part of this move, MMTC, Hindustan Copper, Rashtriya Chemicals, National Fertilizers, and State Trading Corporation are on the government’s selloff agenda.

Since last year, ownership has been broad-based in Oil India Limited, NHPC, NTPC and Rural Electrification Corporation, while the process is on for National Mineral Development Corporation and Satluj Jal Vidyut Nigam.

NMDC’s follow-on offer is from March 10 to March 12, and the government plans to sell 8.4 per cent equity. Satluj has filed for application to make an open offer last month and is targeting to raise Rs 1,200 crore.

The market capitalisation of the five companies which have been listed since October, 2004 has increased 3.8 times from the book value of Rs 78,841 crore to a massive Rs 2,98,929 crore, finance minister Pranab Mukherjee had said in the budget, making a case for making the divestment programme broad-based.

The 13th Finance Commission has recommended divestment of the government’s stake in various entities, which should fetch Rs 3,81,000 crore to the exchequer.

Meanwhile, Sebi has allowed Coal India to offer shares to its employees, including those of its subsidiaries. The coal major, which is planning an IPO later this year, wants to reserve about 1 per cent of its shares for its employees. The government, which owns 100 per cent equity in Coal India, is planning to divest a 10 per cent stake through the proposed IPO.