Our Bureau

New Delhi, Jan. 11

WITH a buoyant stock market and foreign institutional investors reiterating their confidence in the India story, the Government has decided to expedite the proposed sale of a part of its holding in Bharat Heavy Electricals Ltd (BHEL) and exit Maruti Udyog Ltd (MUL). The process is to be completed before the end of the current financial year.

The disinvestment would be done through public issue in order to ensure greater public participation in these companies. The money raised in the process would be used for funding social sector projects and cutting fiscal deficit.

The Finance Minister, Mr P. Chidambaram, had met the Prime Minister, Dr Manmohan Singh, on this issue recently and had got the green signal to go ahead, official sources said on Tuesday.

In the case of BHEL, the Government would offer five per cent of its holding in the public offer, sources said. This is expected to garner around Rs 950 crore and the sell-off would bring down the Government holding in the company to 62.72 per cent.

In the case of Maruti, the Government intends to sell its 18.24 per cent residual stake in phases. The value of Government holding in Maruti is close to Rs 2,400 crore. The amount to be offered in the ensuing public offer would be finalised soon, sources said.

Last year, around 25 per cent of Government stake in Maruti was offloaded through an initial public offer following which the Government holding in the company had come down to 18.24 per cent.

Sources indicated that the proposal is likely to be placed before the Cabinet within the next few weeks.

(This article was published in the Business Line print edition dated January 12, 2005)
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