New Delhi: The showing of the NTPC share sale is worrying not because the government almost didn’t find enough takers for shares in one of the country’s most valuable state-owned firms but because of what it means for planned share sales in other such companies.
All along, the government has assumed that a ready market exists for any stake it is willing to sell in companies it owns.
That doesn’t seem to be the case—although there are several extraneous factors involved in the case of the NTPC share sale, ranging from the state of global stock markets (which have had a horrid run over the past few weeks) to the lack of incentives for investment banks managing the issue.
This could mean that the government will really have to work hard to raise the amount of money it wants to by divesting stakes in state-owned firms. With every passing day, the share of state-owned firms in the Indian economy is shrinking. Is it any wonder that their perceived value isn’t what it once was?