The Hindu Business Line : Strategic sale route to be revived after SC verdict — PSUs' offers to redefine approach to capital market: Shourie

Industry & Economy - Disinvestment

Strategic sale route to be revived after SC verdict — PSUs' offers to redefine approach to capital market: Shourie

Our Bureau

New Delhi , March 5

THE Disinvestment Minister, Mr Arun Shourie, said the success of the six public offers of IPCL, CMC Ltd, IBP Co Ltd, Dredging Corporation, Gail (India) Ltd and ONGC will "redefine India's approach and perception of capital markets."

"We have crossed a milestone in many ways," Mr Shourie told presspersons here on Friday, but was quick to add that the Government "must stick to the strategic sale route for disinvestment of public sector undertakings."

The Government will revive the stalled strategic sale process to privatise a slew of PSUs after the Supreme Court gives its final verdict on the matter, he said.

The Minister said he was not aware whether Berkshire Hathaway's Mr Warren Buffet had invested in ONGC. "But if such an astute investor has done this, it will be a vote for India," he observed.

It will have a big impact when such big funds come to India, he said. "I attach a good deal of importance to such funds. Their investments will be able to give confidence to retail investors who would then believe that it is a good investment because such big funds are investing," he added.

Mr Shourie said all the six public offers have been a big success despite criticism that these were "imprudent and impossible."

"In these six weeks, we would have raised three and a half times what was raised in the three years between 2000 to 2003, and a quarter more than what has been raised in the equity market in India since 1998-99," he disclosed.

The ONGC offer was oversubscribed in the very first hour, with investors submitting bids that were 2.12 times the total offer size. "By now, bids for over $4.85 billion (over Rs 20,000 crore) have come in," he announced.

Mr Shourie said the Government would realise a minimum of Rs 13,100 crore from the six offers if the floor price, or the lower end of the price band, was taken as the final offer price. "Our focus is on meeting the disinvestment target of Rs 14,500 crore for the current fiscal," he stated.

These results show what can be achieved when all of us work together, cutting out unnecessary procedural knots and are vigilant and react swiftly, the Minister said.

According to Mr Shourie, the success of the public offers also shows Indian strength. "We must see the way the perception about India has changed across the world and must stop discouraging ourselves," he said.

Referring to criticism of excessive bunching of the six issues, the unrealistic size of the issues, how these two together were the factors that were bringing down the stock markets, specifically the prices of these six stocks, and why this was not the right time for issuing the shares what with a falling market, he said, "It was but right to turn a Nelson's eye to such discouraging advice."

Calling to "exhume the real character of our stock market," Mr Shourie said it was worth reflecting what would have happened if these offers had been nipped in the bud.

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