The Centre has begun preparation for disinvestment for National Aluminium Co Ltd (Nalco) and Hindustan Copper Ltd without follow-on offers (FPO). However, for SAIL, the Government has revived the process for a combined exercise – stake-sale and an FPO.

The Government may time these three disinvestments in the October-December quarter this year.

The Government has recently been informed by the Ministry of Mines that Nalco and Hindustan Copper would not require any equity issue now, while the Ministry of Steel has conveyed that SAIL would need funds through a follow-on offer, top officials of the three government-owned companies told Business Line .

According to Nalco CMD, Mr B.L. Bagra, for the next three years, the PSE will not need any fresh equity fund. Mr Shakeel Ahmed, CMD of Hindustan Copper, said the Ministry this month has communicated to the Government that the company could manage without fresh issue of shares at present. Both the companies felt that internal generation could take care of their expansion plans for next two to three years.

SAIL's equity issue

A Steel Ministry source admitted that SAIL preferred to make fresh equity issue to raise money for its on-going modernisation and expansion plans. The filing of prospectus with the market regulator for the three listed companies has been aimed in September.

The Government expects the stock market valuations to improve towards the end of this year. “If that happens, the Government should be able to mop up around Rs 8,000 crore through stake sale of the three metal and mining companies,” a senior bureaucrat said.

Last year, SAIL had planned a two-tranche FPO of 5 per cent each. The Government stake sale in SAIL was also planned in two takes for another 10 per cent.

The Government also had targeted 10 per cent disinvestment each in Nalco and Hindustan Copper.

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