With Indian Oil Stake Sale, Government Eyes Best ‘First Half’ in 7 Years


NEW DELHI:  With a 10 per cent stake sale in Indian Oil Corporation scheduled for Monday expected  to fetch Rs. 9300 crore, the Narendra Modi government’s disinvestment kitty may swell to Rs. 12,600 crore this fiscal. The figure will be the best ‘first-half’ in 7 fiscals.

The government has sold minority stake in three PSUs – PFC, REC and Dredging Corporation – to raise over Rs. 3,300 crore so far this fiscal.

“We have already completed three issues and on Monday, we will have the fourth one. Although we are more than a month to go from the first half to end, this will be the best ever first half in past seven fiscals,” said Disinvestment Secretary Aradhana Johri.

In the first half of the last fiscal – 2014-15 – the Department of Disinvestment could not divest stake in a single Public Sector Unit. But in the same period of 2013-14, it had sold stake in six PSUs to garner Rs. 1,300 crore.

In first six months of 2012-13 too, no divestment took place. Only one issue materialised in the corresponding period of 2011-12, collecting Rs. 1,500 crore.

In the first-half of 2010-11, the department of disinvestment garnered Rs. 2,400 crore through minority stake sales in PSUs. The figure for the first half of 2009-10 was Rs. 4,200 crore.

The disinvestment department has been set a mammoth target of Rs. 69,500 crore in the current fiscal. Of this, Rs. 41,000 crore is expected to come from minority stake sale in PSUs, and another Rs. 28,500 crore from strategic stake sales.

So far this fiscal, Indian equity markets have been volatile amid the slump in Chinese market and Greek crisis and fears of impending rate hike by the US Federal Reserve.

The BSE Sensex has dropped by over three per cent since the beginning of the current fiscal, but the three disinvestments so far have been successful, with strong demand from retail and institutional investors.

“Investors feel India is an outlier among emerging markets. We have a robust pipeline of stocks and the work is to keep the ball rolling,” said Ms Johri, who took charge of the department in October last year.

The department has lined up over two dozen PSUs, including ONGC, BHEL, NALCO, NMDC, MMTC and Engineers India, for stake sale.

The government would sell 10 per cent stake in IOC on Monday at a floor price of Rs. 387 a share – about two per cent discount over last closing – which is likely to fetch Rs. 9,302 crore to the exchequer. Around 24.28 crore shares will be on sale.


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