With choppy conditions in the stock market, the Department of Public Enterprises (DPE) is in disagreement with the Finance Ministry on pushing PSUs for listing and follow-on public offers through a “diktat”. The Department of Disinvestment, under the Finance Ministry, has identified PSU majors like Oil India Ltd, Rashtriya Ispat Nigam Ltd, MMTC Ltd and NBCC for a stake sale, as it would like to achieve the Rs 40,000 crore sell-off target for the current fiscal.
The Cabinet has already given clearance for disinvestment of SAIL, ONGC and HCL, while the government raised Rs 1,162 crore by divesting a 5 per cent stake in Power Finance Corporation last month.
DPE Secretary Bhaskar Chatterjee said in view of the market dynamics, it should be left to the board-driven PSUs to decide on the time of launch of share offers.
“We accept the target given by the Finance Ministry certainly. But as to when and how they (PSUs) should go to the market certainly depends on the (company) board to decide in terms of the best interest… that’s we want to say,” Chatterjee said.
He said all the companies identified for the market sell-off have strong bottomlines and they would like to maximise returns.
“It can’t be in the form of a diktat,” the DPE Secretary said, adding that the companies would choose the timings when the market is good. “I can’t tell a company go to the market tomorrow,” he said.
Chatterjee said the besides meeting the fiscal targets, the objective of listing and follow-on offers is also to bring about market exposure for state-owned firms. It also brings in transparency and less government control, he said.
In line with weak global markets, the Indian stock indices are choppy. The interest in the primary market has also been waning with several of the initial public offerings (IPOs) and FPOs trading at the offer or below offer value.