The Hindu Business Line : Govt to consider offloading residual stake in five cos

DISINVESTMENT of the Centre's holding in various companies is set to get another push with the Government moving a proposal to divest its residual stake in a clutch of companies including VSNL Ltd and Balco.

The proposal is to come up for discussion at the Cabinet Committee on Economic Affairs (CCEA) meeting on Thursday.

The other companies in which the Government proposes to offload its remaining holdings are IBP Co Ltd, IPCL and CMC Ltd.

However, details of the proposed stake sale and the modalities were not readily available.

The Government holds a 49-per cent in Balco, while its holding in VSNL was 26.12 per cent as on September 2005, according to the shareholding details provided in the BSE Web site. In the other three companies, the Government holding is miniscule — as low as less than one per cent in IBP.

Interestingly, the five companies are owned by some of the top names in the Indian corporate world. While the Mukesh Ambani led Reliance group owns IPCL, the house of Tatas are the current promoters of VSNL and CMC (a subsidiary of TCS), and Mr Anil Aggarwal's Sterlite group owns a majority 51 per cent stake in Balco. IBP is a subsidiary of oil sector giant Indian Oil Corporation that has a 53 per cent holding in the company.

The move comes barely a couple of days after the Government had called for an expression of interest from banks and financial institutions for taking over 8 per cent of its remaining 18.28 per cent stake in Maruti Udyog Ltd (MUL). The MUL stake sale is estimated to fetch the Government around Rs 1,500 crore.

Recently, an inter-ministerial committee of secretaries had cleared the proposal to offload the Government's stake in a few other public sector units (PSUs) to raise around Rs 5,000 crore during the current fiscal.

The companies include Concor, Bharat Sanchar Nigam Ltd, Power Finance Corporation, Shipping Corporation of India and Power Grid Corporation. The Government proposes to offload 5-10 per cent of its stake in these companies.

With the fiscal set to enter the last quarter, the Government has been showing urgency in pushing ahead with at least a few disinvestment proposals.

From the current year, disinvestment proceeds are to flow into the National Investment Fund resources, from which money will be allocated to social sector projects and to revive weak but viable PSUs.