New Delhi: The finance ministry is planning to transfer government shares of 10 PSUs, including MMTC, ITDC, MRPL, Hindustan Copper, to a fund to meet Securities and Exchange Board of India’s (Sebi) minimum public shareholding norms.

As per the norms, PSUs were mandated to achieve the minimum 25% public shareholding by 21 August 2017, which was later extended by a year. With the deadline looming, the ministry is contemplating to shift government shareholding in the 10 PSUs to ‘Special National Investment Fund’ (SNIF) to meet the market watchdog’s norms as it may not be possible to sell stake in these companies in the current market conditions.

The proposal, being prepared by the finance ministry, would be placed before the Union cabinet for approval soon, people familiar with the matter told PTI. The 10 PSUs in which government shareholding has to be brought down to 75% also include Coal India, NLC (formerly Neyveli Lignite) , SJVN, State Trading Corporation (STC), Kudremukh Iron Ore Company (KIOCL) and Madras Fertilisers.

As per the note prepared by the ministry, alternate mechanism (AM) for disinvestment would be empowered to decide on shares of which PSUs could be transferred to SNIF. The AM will help the ministry in taking quick decisions in view of the changing market conditions.

Currently, the ministry is conducting roadshows for selling stake in Coal India and NLC. Government holds 78.32% stake in CIL and 84.04% in NLC. In case the ministry is unable to offload shares in these two companies to 75%, the AM would decide on transferring their shareholding to SNIF, the people said.

In August last, the cabinet had approved setting up of an AM comprising finance minister, road transport minister and the concerned administrative minister, to decide on modalities of stake sale in PSUs. The government had in 2013 approved setting up of SNIF with the specific objective of meeting the minimum public shareholding of 10% as was then mandated by the Sebi.

The Centre had then transferred 10% of its stake in six sick CPSEs - FACT, Hindustan Photo Films Manufacturing, HMT, Scooters India, Andrew Yule and Company, and ITI— to SNIF .

Now, with the 21 August deadline approaching fast, the government is considering to transfer more shares to meet the 25% public float norm. SNIF was formed to transfer the number of shares that was required to make six sick companies compliant with the minimum public shareholding norm without any consideration.

The fund was managed by independent professional fund managers and was assigned to sell the shares within a period of five years. The funds realised from the stake-sale would be used for funding social sector schemes of the government.