The government plans to come out with two initial public offers (IPO) — RINL and NBCC — to raise about Rs 3,000 crore in the current fiscal itself as part of its efforts to garner funds.

“We will file draft prospectus for NBCC IPO in 10-15 days. For RINL we have initiated the process to launch it before March end,” a senior finance ministry official told PTI.

The government plans to divest 10 per cent of its stake in the National Building Construction Corporation (NBCC) through an IPO and plans to raise Rs 250 crore. Government owns 100 per cent in NBCC.

Besides for Rashtriya Ispat Nigam (RINL), which is expected to give Rs 2,500 crore to the exchequer, the government has already appointed merchant bankers.

The IPO of Hindustan Aeronautics is unlikely in the current fiscal, the official said adding the government will explore different options for stake sale in already listed PSUs.

“We are ready with ONGC. We will explore the options of institutional placement and buyback for stake sale in the company once there is clarity on the rules,” he said.

The ONGC FPO is expected to fetch Rs 12,000 crore to the government.

The official added that after ONGC issue, the government will think of going ahead with stake sale of other listed PSUs after assessing the appetite of the market.

Market regulator Securities and Exchange Board of India (SEBI) has relaxed norms for buyback of shares and dilution of equity by companies.

The new norms would help the companies to complete the process of selling shares within days against the normal process which can take months, a move that will facilitate offloading of government shares in central PSUs.

Besides reducing the timeline for completion of buyback of shares by companies to 34-44 days, it has also introduced a new mechanism called Institutional Placement Programme (IPP) — that would allow promoters to sell up to 10 per cent of their capital through an auction.

The DoD is running against time to meet its ambitious disinvestment target of Rs 40,000 crore for the current fiscal. Till date it has been able to raise only Rs 1,145 crore through disinvestment in PFC.

In order to fast track the disinvestment programme, the DoD had sought opinion of concerned ministries for buyback of shares and prepared a list of cash-rich PSUs in this regard.

Several ministries like oil, power, steel, coal and mines are believed to have opposed the proposal as it could impact the business expansion plans of the PSUs.

(This article was published on January 22, 2012)
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