New Delhi: With the UPA set to form a government without the support of the Left and other smaller parties which have fixed ideology against divestment, the PSU firms are expected to tap the stock market route in an aggressive way for raising resources.
The Congress, which has emerged stronger, had committed in its election manifesto to giving more shareholding to the public through divestment of PSUs’ shares with the government retaining a majority stake.
As stock markets are expected to build on the strength it got in last few weeks, the PSUs would get a chance to raise resources from this route even as the Left parties are out of the way to block these reforms.
“It is an opportunity for CPSEs to go to the stock market. It will also test the market and improve the corporate governance of CPSEs,” chairman and managing director of National Buildings Construction Corporation Arup Roy Choudhury said.
Roy Choudhury, who also heads PSUs body the Standing Conference of Public Enterprises (SCOPE), said that the decision to enter the capital market would depend on an individual public sector unit.
Ficci President Harsh Pati Singhania felt that with a pick up in the economy, the CPSE shares are expected to get a good response from investors.
“Float these (CPSEs) shares in the market ... they will get a good response particularly when we are hoping that there is going to be an upturn in the economy,” Singhania said.
The UPA government could not pursue equity sale in PSUs because of opposition from the Left parties which supported it for over four years. Later, conditions in the market deteriorated deterring the PSUs to tap this resource.
There are 242 public sector units in the country employing 15.7 lakh people. The number of profit-making PSUs was 159 in 2007-08 while loss-making units numbered 54.