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The government has identified some public sector companies for divestment, but its primary focus would be to dilute equity in listed profitable companies with less than 10 per cent public shareholding, with follow-on public offerings.
"A few public sector undertakings have been identified for sale of small portions of the government shareholding in the domestic market and for issue of fresh equity to meet their fund requirements, if required," Union finance minister Pranab Mukherjee said on Tuesday at the Economic Editors' Conference.
The minister said the government would wait for the right opportunity to offload its equity in public sector companies. He added the government had not yet revised the target for divestment proceeds for this year.
The Budget had estimated Rs 1,120 crore (Rs 11.2 billion) revenue from this. The divestment department was in talks with other ministries to identify the cases for divestment, he said.
"Given that much of the recent spurt in growth has come about due to the significant increase in growth of private investment, it is important that we address the issues that are holding back the revival of private investment in the economy. The efforts on fiscal consolidation and debt management and the mobilisation of additional resources through divestment proceeds should help in this regard," he said.
Recently, the government concluded public offers of equity in NHPC and Oil India. The market capitalisation of these companies, post-listing, has increased to Rs 37,702 crore (Rs 377.02 billion) and Rs 27,220 crore (Rs 272.2 billion), respectively, a rise of 106 per cent and 177 per cent. There was a mix of direct divestment as well as fresh equity in the case of these companies.
The government will directly sell its stake in NTPC without issuing of any fresh equity. In case of Satluj Jal Vidyut Nigam Ltd and Rural Electrification Corporation, there would be a mix of fresh equity and direct government stake sale.
