Govt’s disinvestment kitty set to cross 1 lakh crore mark

Govt’s disinvestment kitty set to cross 1 lakh crore mark

New Delhi: The government’s disinvestment proceeds from all its asset sales till date are set to cross the one lakh crore milestone with its share sale in Power Finance Corp scheduled to hit the market later this week.

The government may garner over 1,100 crore from sale of its 5% stake in PFC through a follow-on public offer (FPO). The process will also involve sale of 15 % fresh equity worth over 3,300 crore, scheduled for 10-13 May.

The proposed 1,100-crore share sale in PFC would take the gross proceeds for the government from its various disinvestment exercises till date to about 1,00,800 crore.

Currently, the total receipts stands at 99,738.92 crore from the government’s various disinvestment programmes, ever since they begun in the financial year 1991-92, as per the data available with the Department of Disinvestment.

PFC would be the first disinvestment for the current financial year 2011-12, while there have been only three fiscals — 1993-94, 2006-07 and 2008-09 — with no disinvestment receipts at all into the government coffers.

The government has currently lined up three public sector majors — ONGC (likely in July), SAIL and Hindustan Copper Ltd -- among its forthcoming disinvestments.

The government has proposed an ambitious disinvestment target of 95,000 crore from sale of shares in public sector companies over next three fiscals, including 40,000 crore in the current fiscal.

This is despite the government not being able to meet its target of 40,000 crore in the last fiscal, when total disinvestment proceeds stood at 22,762.96 crore.

In 2010-11, the government carried out disinvestment in SJVN Ltd (Rs 1062.74 crore), Engineers India Ltd (Rs 959.65 crore), Coal India (Rs 15,199.44 crore), PowerGrid (Rs 3721.17 crore), MOIL (Rs 1,237.51 crore) and SCI (Rs 582.45 crore).

Presenting the budget for the current fiscal, finance minister Pranab Mukherjee had said that he intends to maintain the momentum on disinvestment in 2011-12 by raising 40,000 crore.

Besides, the budget documents projected the disinvestment receipts at 30,000 crore and 25,000 crore in 2012-13 and 2013-14, respectively.

The gross disinvestment proceeds of 99,738.92 crore till date includes 81,673.90 crore through sale of minority shareholding in central public sector enterprises (CPSEs) and 1,317.23 crore through sale of majority shareholding of one CPSE to another such undertaking.

Besides, it includes 6,344.35 crore from strategic sales, 6,398.27 crore from sale of residual shareholding in disinvested CPSEs/companies and 4,005.17 crore from other disinvestment-related transactions.

Year-wise, the highest amount of disinvestment proceeds was recorded in 2009-10 at 23,552.93 crore, followed by 22,762.96 crore in 2010-11 and 15,547.41 crore in 2003-04.

In the first year of disinvestment in 1991-92, the government garnered 3,037.74 crore, followed by 1912.51 crore in 1992-93.

VSNL was the first CPSE to be divested by way of a Public Offer in 1999-00, prior to which shares were sold through other means such as auction method or overseas offerings through GDRs.

ONGC Public Offer in 2003-04 has been the largest CPSE FPO, raising 10,542 crore, while Coal India Public Offer in 2010-11 is the largest public sector IPO raising 15,199 crore.

The government’s disinvestment policy states that the government has to retain majority shareholding of at least 51% and management control of the PSUs.

The policy also calls for listing of unlisted CPSEs with no accumulated losses and having earned net profit in three preceding consecutive years.