SAIL divestment process starts, issue likely by Oct

The process of divesting government equity in Steel Authority of India Ltd (SAIL) took off on Wednesday with the committee set up for the purpose, headed by steel secretary Atul Chaturvedi, meeting for the first time on the issue.

The next stage would be selection and appointment of merchant bankers and intermediaries, followed by due diligence and the filing process.

Finance ministry estimates suggest that the SAIL issue could hit the market over the next three to four months that is not before September-October. Of course, the timing of the SAIL divestment would depend on the market conditions.

Also, no two public sector issues can be out at the same time. An empowered group of ministers, headed by finance minister Pranab Mukherjee, would fix the timeline.

The share sale is expected to fetch the government around Rs 8,000 crore in each tranche. 

Speaking to DNA, disinvestment secretary Sumit Bose gave the line-up of PSUs likely to be divested over the coming months, besides SAIL.

While Cabinet approval has come for Engineers India Ltd, preliminary work on appointment of merchant bankers has started in the case of Coal India Ltd (CIL). Cabinet nod for CIL is awaited.

Selection of bankers has begun for divesting government stake in Hindustan Copper also, where Cabinet nod is yet to come. 

Bose explained, “Last week we got a dispensation from the Cabinet that once administrative ministry or finmin or both approve a proposal, even as the cabinet approval process is on, we can appoint merchant bankers and other intermediaries, as well as start the due diligence process.”

But statutory filings can happen only after the cabinet nod. Among others, the government is looking at divesting stake in Power Grid Corporation, Shipping Corporation (where no formal action has been taken) and Manganese Ore.

As for MMTC, Bose said that the commerce ministry has agreed to divest in principle, but the modalities are yet to be chalked out.

On Rashtriya Ispat Nigam Ltd, he pointed out that after getting the Navaratna status recently, the PSU was mandated for listing within two years, and that the process had just been initiated.

As for ONGC, the Disinvestment Department, under the Finance Ministry, is in talks with the Petroleum Ministry, but no formal decision has been taken on the modalities or the timing of second round of disinvestment, if at all.

According to Bose, a clear picture on ONGC divestment could emerge within a month or so.

When asked about Bharat Sanchar Nigam Ltd, which has witnessed stiff resistance from its Union on the issue, Bose said that the Department of Telecommunications has not taken a decision on the matter so far.