New Delhi:With an array of public sector undertakings (PSUs) like Oil and Natural Gas Corp. Ltd (ONGC) lined up for disinvestment this fiscal, employees of state-owned firms will get the right to subscribe to more than double the present quota of shares after market regulator Securities and Exchange Board of India (Sebi) has agreed to a government proposal.
Enthused by the employee subscription demand earlier this year in the Indian Oil Corp. Ltd. (IOC) and NTPC share sale, the finance ministry had asked Sebi to allow employees to apply for shares beyond the limit of Rs.2 lakh per employee.
Sebi in its board meeting on 23 September allowed the firms to allot more shares for their employees during public offers by increasing the limit for the value of such allotments to Rs.5 lakh, up from Rs.2 lakh currently, under staff quota. “The next offer for sale or initial public offering of a PSU would have the new ceiling for the employee quota,” an official said.
Currently the government offers shares to employees of a company up to a maximum of 0.5% of the post issue capital of the issuer. The shares are offered at a discount of 5%. The government had raised Rs.262 crore through allotment of shares to employees of IOC, and Rs.204 crore to employees of NTPC.
In the IOC share sale, employees had applied for 53% of the shares offered for them, while in the NTPC the employees bid for over 85% of the shares. The government has lined up over a dozen companies, including ONGC, NMDC and Bharat Heavy Electricals Ltd (BHEL) for disinvestment in the current fiscal. It hopes to raise over Rs.56,500 crore through stake sale in PSUs. Of this, Rs.36,000 crore would come from minority stake sale, and another Rs.20,500 crore from strategic stake sale. The government has already raked in over Rs.3,580 crore through stake sale in PSUs in the current fiscal.