Government clears stake sale in 4 PSUs

The government on Friday approved sale of its minority stakes in four public sector firms — Hindustan Copper, Oil India, MMTC and Nalco — to raise up to Rs15,000 crore.

The Cabinet Committee on Economic Affairs (CCEA) has, however, not taken any decision on disinvestment of Neyveli Lignite, that was also on the agenda.

The government has approved the proposal to sell 10 per cent stake in Oil India Ltd and another 9.59% disinvestment in Hindustan Copper Ltd, sources said.

Further, the CCEA also cleared the proposal of 12.15% stake sale of Nalco and 9.33% in MMTC through Offer for Sale (OFS) route.

However, the 5 per cent stake sale of Neyveli Lignite was not taken up by the CCEA, sources added.

Finance Minister P Chidambaram had last month asked officials to expedite the process of disinvestment so that state-owned companies could hit stock markets in time and help the government achieve the target of Rs30,000 crore in the current fiscal.

Although five months have passed in the current fiscal, the government has not been able to come out with a single public issue.

Raising adequate funds from disinvestment was necessary to keep in check the fiscal deficit which is facing pressure due to rising food, fuel and fertiliser subsidy bills.

The government earlier deferred the initial public offer (IPO) of Rashtriya Ispat Nigam Ltd (RINL) due to weak stock market conditions. The Rs2,500-crore RINL issue was originally proposed to hit the markets in July.

Due to uncertain market conditions, the government in the last fiscal could raise only Rs14,000 crore from disinvestment against the target of Rs40,000 crore.