Selloff mulled in few profitable PSUs

Finance minister Pranab Mukherjee on Tuesday said the government is considering divestment in some public sector undertakings with high profits.

“Divestment is not a new phenomenon. It has been happening since 1991. This time also we have decided to continue with the policy of divesting government stake in some companies with high profits,” Mukherjee said.  The government will divest stake in PSUs when market conditions are favourable, he said.

“Of course, we will like to take maximum advantage from the market. In the past, it has happened that we have chosen a company for divestment but shelved the decision when the market turned bad,” Mukherjee told the Rajya Sabha during question hour.

Mukherjee also said there would be some important divestment of PSUs in the current financial year ending March.  “Government would offer small portions of its shareholding in the central public sector enterprises to the general public in domestic market through initial public offerings or follow-on public offerings,” he said, replying to questions in the Upper House.

He reiterated that government stake in PSUs would not fall below 51% even after divestment. The government has raised Rs 53,000 crore from divestment since 1991, Mukherjee said.

The Budget for 2009-10 has projected Rs 1,120 crore from divestment in six PSUs — RITES Ltd, Cochin Shipyard Ltd, Telecommunications Consultants India Ltd, Manganese Ore India Ltd, Rashtriya Ispat Nigam Ltd and Satluj Jal Vidyut Nigam Ltd.

However, S S Palanimanickam, minister of state for finance, said divestment in RITES has been deferred for the present. The government has also decided to divest stake in loss-making Tyre Corp of India Ltd and Central Inland Water Transport Corp Ltd, Palanimanickam said.