Giving its disinvestment programme a big push, the Union Government has decided to dilute its stake in three public sector entities: ONGC, Coal India and NHPC. At the current market price, it can mobilise around ₹43,000 crore, close to the disinvestment target of ₹43,425 crore.

With the Cabinet Committee on Economic Affairs’ (CCEA) nod, as much as 11.36 per cent of the Government holding in NHPC, 10 per cent in Coal India, and 5 per cent in ONGC will be diluted. Currently, the Government owns 89.65 per cent in Coal India, 85.96 per cent in NHPC and 68.94 per cent in ONGC.

The good news for retail investors is that 20 per cent of the shares on offer will be reserved for them. Beside this, shares will be offered at a 5 per cent discount to retail investors (those bidding for less than ₹2 lakh).

The Government will use the offer-for-sale through stock exchanges mechanism for the disinvestment.

This is different from the Follow-on Public Offer, which is considered time consuming and costly. Besides, in the offer-for-sale mechanism, not much documentation is required and the entire process could be completed in a week.

Since the BJP came to power in May, there have been two IPOs: Snowman Logistics and Sharda Cropchem. Both were oversubscribed nearly 60 times.

The Government, it seems, wants to capitalise on the mood.

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