The Hindu : Resource mobilisation far below target

Online edition of India's National Newspaper
Friday, Feb 14, 2003

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Resource mobilisation far below target

By Our Special Correspondent

NEW DELHI FEB. 13. The disinvestment process appears to be back on track with global advisors to be appointed soon for the sale of Hindustan Petroleum Corporation Limited (HPCL) and the inter-Ministerial group on disinvesting equity in Bharat Petroleum Corporation Limited (BPCL) expected to meet next week.

The current fiscal, however, is not likely to see any more disinvestment leaving the total resource mobilisation at Rs. 3,400 crores against the budget target of Rs. 12,000 crores. Even the initial public offer (IPO) for Maruti Udyog Limited (MUL) is not ready to be carried out during 2002-3.

If the companies had been ready for disinvestment earlier in the year, the Government would have been able to mobilise more resources. The amount would have been substantial for the two oil companies where the process was held up for about four months. In the case of BPCL, 35 per cent will be divested leaving the Government with 26 per cent shareholding while the sale of HPCL would be of 34 per cent and five per cent to employees, leaving the Government with 12 per cent equity stake. The Maruti Udyog IPO would also have brought in revenue of about Rs. 800 crores with 25 per cent Government equity stake being divested. The Disinvestment Secretary, Pradip Baijal, said the Maruti Udyog IPO was likely to hit the market by April or May this year. The Government held about 44 per cent stake in the company after divesting four per cent stake in favour of Suzuki Motor Corporation of Japan through a rights issue earlier this year. Regarding the public offer, he stressed that the Government was treading cautiously in the case of MUL disinvestment.

Speaking on the sidelines of a disinvestment seminar organised by the Assocham, he said the inter-Ministerial group on BPCL disinvestment would meet to discuss the quantum of shares to be offered in the domestic and global markets. As for HPCL, he said the global advisors for strategic sale would be appointed within the next five or six days.

He said the next meeting of the Cabinet Committee on Disinvestment may be held prior to the budget session on February 17.

Regarding disinvestment of the national carrier, Air India, he said the time was not ripe for re-starting the process which had come to a halt over a year ago. This was due to the upheaval in the aviation sector globally ever since the terrorist attacks of September 11 last year.

In regard to NALCO, another public company where disinvestment has been stalled since November, he said talks would be initiated with stakeholders to move the process forward.

As for Shipping Corporation of India, he said a committee of secretaries will have to meet to firm up the transaction documents which will then be sent for Cabinet approval.

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