May as an alternative divest stake in companies similar to NHPC, NMDC to meet divestment target;
The depressed share costs of public sector behemoths Coal India as well as ONGC is forcing the Finance bureau rethinks its decision to reduce its stake in the two companies, top administration officials have told.
If the share costs of the two companies remain at present levels, the 10% stake auction in Coal India as well as 5% stake sale in ONGC will probably be called off.
“We are thinking a plan for the remains of the year, which will not feature either Coal India or ONGC, if costs stay about current levels,” a leading Finance bureau official said.
The move will set back the administrations ambitious disinvestment plans, as well as will likely cut potential disinvestment proceeds by approximately Rs 37,500 crore at present costs. It will also represent that PSU disinvestment revenue for the year will reduce short of the budgeted aim of Rs 43,425 crore.
The officials, though, added that there are 6-7 corporations, including some that were not in the inventive divestment plan that can carry a total of above Rs 20,000 crore.
The new plan is probable to comprise names such as Power Finance Corp, Rural Electrification Corp and NHPC, as well as names which were initially not being targeted recent year, including Nalco, Hindustan Copper, NMDC, and other corporations in which the Centre has an above 75% stake.
The officials held they were watching the souks intimately and made it clear that in case the share costs of the two corporations ascend “considerably” by early March, they could still advance with the planned disinvestment as well as meet the disinvestment target.
ONGC stopped up at Rs 347.90 a share on Monday, downward 25% as of its high of Rs 464 in 2014. Coal India stopped up at 358.70 per share, downward 15% as of its 2014 high of Rs 420.24. These two companies hit those high in untimely June. Since then, while, the stocks have been lessening as investors expect to purchase them at cheaper prices when the management issues fresh shares.
Officials preserve that lessening short of the financial planned stake auction estimates, even at a time while the management is resorting to large spending cuts to meet the financial shortfall target, is more suitable than advertising the so-called family jewels at lower costs.
It, though, remains to be seen if Finance Minister Arun Jaitley’s office, or the budget division, shares these views since the final call on scrapping the two mega stake sales as well as the substitute plan will eventually have to come from Jaitley.
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