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Stable stocks to give divestment programme a big lift

New Delhi:  The government’s disinvestment programme will gather momentum as stock markets have stabilised now, a top official has said.

“Time has come (for divestment of PSUs). The markets were volatile, now the markets have stabilised,” the official said.

The official added that monsoon is so far ‘good’ and its distribution adequate.

The government is targeting Rs 69,500 crore from stake sale in PSUs this fiscal. Of this, Rs 41,000 crore is to come from minority share sale in PSUs and Rs 28,500 crore from strategic stake sale.

Recently, the benchmark BSE Sensex had fallen on RBI’s cautious stance on economic recovery and concerns on deficient monsoon.

The Met department earlier this month had predicted that rainfall was likely to be only 88 per cent of the long term average, triggering fears of a drought.

There are also apprehensions that the impending US Fed rate hike could lead to flight of foreign funds from Indian capital markets, thus impacting the disinvestment plan.

Earlier, the officials have raised concerns about meeting the disinvestment target, citing market volatility.

Although the disinvestment department received approval from the Cabinet for selling minority stakes worth about Rs 50,000 crore in a host of PSUs, it has only been able to divest stake in one company, REC, this fiscal so far.

The Cabinet approved sale of 5 per cent stakes in ONGC, BHEL and NTPC as well as 10 per cent each in IOC, NALCO and NMDC.

As per the Public Enterprise Survey 2013-14, India has 234 Central Public Sector Enterprises (CPSEs), of which 46 are listed.

Market volatility has impacted valuations, in particular, of companies like Oil and Natural Gas Corp which has been on the disinvestment list since last fiscal without any action, the official said.

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