The government will go ahead with stake sale in four state-run firms to achieve its target of raising Rs 30,000 crore through divestment in the current fiscal, the finance ministry has said. Minister of state for finance, SS Palanimanickam, said on Friday that the government has Cabinet approval for 10.82% stake sale in Steel Authority of India, 12.5% in Rashtriya Chemical and Fertiliser, 12.15% in Nalco and 9.33% in MMTC. Sale of shares in these companies will be conducted through the ‘offer for sale’, or auction route. “Central trade unions have demanded stoppage of disinvestment as a matter of their policy. However, disinvestment of minority stakes is carried out as per policy of the government,” Palanimanickam, said. Earlier, divestment secretary Ravi Mathur had said that the government might not be able to reach the divestment target.
“The Rs 30,000-crore disinvestment target may be difficult to reach. My calculation is Rs 25,000 crore or Rs 26,000 crore. We will try to cover Rs 27,000 crore.” Of the current year’s target, the government has already raised Rs 21,504.32 crore through disinvestment in five companies. Palanimanickam said the proceeds would be used for funding capital expenditure in the social sector schemes identified by the Planning Commission and department of expenditure. The government, which is targeting about Rs 3,500 crore from shares sale in SAIL and about Rs 1,400 crore from sell-off in NALCO, is hopeful of greater participation from foreign investors. The divestment offers of NTPC, OIL India and NMDC had evinced a good response from FIs. Foreign institutional investors snapped up almost half of the 9.5% stake the government has divested in NTPC. In the case of Oil India, the foreign participation was 60%, but the issue size was considerably less as compared with the NTPC offer. Earlier, state-run financial institutions, such as LIC, and public sector banks had to bail out the divestment offers of ONGC and Hindustan Copper.