Cabinet clears 10% disinvestment in Hudco

THE Cabinet on Wednesday approved a 10% disinvestment in Housing and Urban Development Corporation (Hudco) through an initial public offer, telecom minister Ravi Shankar Prasad said.

Currently, the government owns 100% in the company, which has a paid-up capital of `2,090 crore, Prasad said. Its net worth is `7,800 crore. Apart from the financing operations, Hudco offers consultancy services, promotes research and studies and helps propagate use of local building materials, cost-effective and innovative construction technologies.

After a gap of more than three years, the Centre will roll out IPOs in PSUs in the current fiscal as part of its disinvestment plan as well as to meet market regulator (Sebi) guidelines on public holdings.

The IPOs are part of the Modi government’s `36,000 crore revenue estimate from minority stake sales in PSUs in 2016-17. Another `20,500 crore will be raised from strategic stake sales in PSUs. So far in the current fiscal, it has raised `2,979 crore by selling shares in hydroelectricity company NHPC and Indian Oil.

While no timeline has been given for the IPO of Hudco, sources said Cochin Shipyard IPO is likely in October-November. The gover nment plans to sell 10% in Cochin Shipyard.

Other PSU IPOs lined up for the current fiscal include the Indian Renewable Energy Development Agency (IREDA).

The last PSU IPO was in March 2012 when the government sold a 10% stake in National Buildings Construction Corporation to raise `125 crore. Choppy markets and lengthy processes often resulted in shelving of listing of many PSUs thereafter.