A Study brought out by The Associated Chambers of Commerce and Industry of India on “Disinvestment: Focused on Listed PSUs” said that government can reduce it’s fiscal deficit by over 90% through divestment of up to 51% equity in 45 PSUs & banks and generate over INR 400000 crores in areas of power, oil & gas, banking, metal, engineering and others.
The study submitted to the government by Mr Sajjan Jindal president of ASSOHAM has identified 20 PSU banks for offloading government equity in them up to 51%. Other PSUs recommended for similar exercise comprise 4 power sector companies as many in metal. From oil sector, 7 companies have been identified by the ASSOCHAM and 4 belonging to engineering and 6 from miscellaneous business.
Mr Jindal said that the proposed amount would help government not only to contain its fiscal deficit but the suggested move could further push up stock markets as also open up channels for infusing funds to support it’s infrastructure expansion drive which requires thousands of crores of rupees.
Among power sector PSUs, whose disinvestment has been recommended by ASSOCHAM include NTPC, PFC, POWERGRID and Rural Electrification Corporation. In NTPC, government stake is currently 89.5%, PFC it is 89.78%, POWERGRID 86.36% and REC 81.82%. In these four companies, if considerable government stake is divested to bring down its equity to 51%, it would earn revenue of Rs.99044 crore. Moreover, the government will not loose its controlling stake in such a manner of disinvestment.
No of shares proposed to be diluted in the power sector consist of 5372518581. In metal sector, 4 companies are recommended for disinvestment, which include Hindustan Copper, National Aluminum Co Ltd, Neyveli Lignite Corporation Ltd and National Mineral Development Corporation. These companies have respective government stake of 99.59%, 87.15%, 93.56% and 98.38%. Total amount by bringing down government stake in these up to 49% could be around INR 97735 crores.
The study said that in oil sector, proposed disinvestment should take place in Bharat Petroleum, Hindustan Petroleum, Indian Oil, Mangalore Refinery & Petrochemicals, ONGC, Chennai Petroleum Co Ltd and Dredging Corporation. The government enjoys 54.93%, 51.11%, 78.92%, 88.57%, 74.1%, 51.89% and 78.5% respective stake in these oil PSUs. Suggested disinvestment in these can bring in INR 78857 crore to government.
Mr Sajjan Jindal said that there are 4 engineering companies in the PSUs recommended for disinvestment by ASSOCHAM which include Bharat Earth Movers, BHEL, EIL and BEL. 54.03% controlling stake lies with government in Bharat Earth Movers against 67.72% of BHEL, 90.4% in EIL and 78.86% in BEL. Proposed disinvestment in the engineering sector can fetch government a revenue of INR 23659 crore.
There are 20 banks identified in the ASSOCHAM Study for disinvestment up to 51% to help government garner INR 22302 crore. The government stake in 20 banks including varies between 76% to around 52%. These include Allahabad Bank, Andhra Bank, Bank of Maharashtra, Bank of Baroda, Bank of India, Canara Bank, Central Bank, Corporation Bank, Dena Bank, IDBI Bank, Indian Bank, Indian Overseas Bank, J&K Bank, Oriental Bank, Punjab National Bank, SBI, Syndicate Bank, UCO Bank, Union Bank and Vijaya Bank.
Mr Jindal said that likewise, there are 6 miscellaneous business in which if disinvestment is accelerated, it can fetch government a revenue of INR 83648 crore. Significant among them included Containers Corporation of India Ltd, GAIL, MMTC, Rashtriya Chemicals & Fertilizers Ltd, Shipping Corporation of India Ltd, State Trading Corporation. In these companies, the government stake is respectively at 63.09%, 57.34%, 99.3%, 92.5%, 80.12% and 91.02%.
Sourse From: http://www.steelguru.com/news/index/2009/09/16/MTExOTEw/Divest_up_to_51pct_equity_in_45_PSU_-_ASSOCHAM.html
Tuesday, September 15, 2009
Divest up to 51pct equity in 45 PSU - ASSOCHAM
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