DIPAM PLANS TO GARNER ~25,000 CR IN APRIL-SEPT

In a bid to reach an ambitious divestment target of ~72,500 crore for 2017-18, the government aims to top at least ~25,000 crore in stake sales for April-September, highest for the first half of any year.For April-June so far, the Department of Investment and Public Asset Management (DIPAM) has already garnered around ~6,600 crore. This comes from selling part of the stake that the government holds in Larsen & Toubro in Specified Undertaking of Unit Trust of India, a five per cent stake sale in Nalco, and share buyback by IndianOil. ARUP ROYCHOUDHURY writes

In a bid to come close to an ambitious divestment target of ~72,500 crore for 2017-18, the Narendra Modi government aims to top at least ~25,000 crore in stake sales for April-September, the highestever for the first half of any year.

For April-June so far, the Department of Investment and Public Asset Management (DIPAM), has already garnered around ~6,600 crore. This comes from selling part of the stake that the government holds in Larsen & Toubro in Specified Undertaking of Unit Trust of India (SUUTI), a five per cent stake sale in Nalco, and share buyback by IndianOil.

This means that for JulySeptember, the Centre wants to mop-up around ~18,400 crore. The previous highest disinvestment proceeds for the first half of a year was around ~21,000 crore in 2016-17.

“In April-June, all the preparations have been put in place for stake sales, like issuing bids for appointing merchant bankers and legal advisors. Hence, in the second half onwards, you can expect a lot of action in terms of shares being offloaded in the exchanges,” said a senior government official.

For the entire year, the government is putting a strong pipeline of companies in place. It is planning to offload 10 per cent stake in NHPC, NTPC, Power Finance Corporation and Steel Authority of India, 15 per cent in NLC, five per cent in Rural Electrification Corporation and three per cent in IndianOil through offer-for-sale. At least three of these could happen before October 1, Business Standard has learnt from sources aware of DIPAM’s plans.

There are also a number of initial public offerings being planned for state-owned rail, defence and insurance companies, including IRCTC, IRCON, IRFC, RVNL, Garden Reach Shipbuilders, Mazagaon Dock Shipbuilders, Bharat Dynamics, New India Assurance, General Insurance, National Insurance, Oriental Insurance and United India Insurance.

Of these, merchant bankers are already said to have been appointed for IRCTC, IRCON and IRFC. Which means that these could be taken to the bourses within the next three months. Also, either one or both of New India Assurance and General Insurance could also make their market debuts soon.