Comments
Amidst preparation for disinvestment in NTPC and Oil India, the Government may now consider offloading part of its stake in Engineers India Ltd. “The Cabinet Committee on Economic Affairs (CCEA) is likely to consider offloading 10 per cent of its equity in Engineers India. The meeting is scheduled on Thursday,” a senior Government official told Business Line . At present, the Government holds 80.40 per cent in the company.
Interestingly, even if this company is a listed one, the Government may use the ‘follow on public offer’ (FPO) method for divesting its stake.
So far, the Government has approved disinvestment in 11 companies. Out of this, disinvestment in the two unlisted companies (Rashtriya Ispat Nigam Ltd and Hindustan Aeronautics Ltd) are to be done through IPOs, while for the six listed ones (NTPC, Oil India, SAIL, MMTC, Nalco and Rashtriya Chemicals and Fertilisers Ltd) offer for sale through stock exchange or auction method will be used.
During the current fiscal year, the Government has shed part of its stake in Hindustan Copper and NMDC through the auction method. Although it has approved selling its share in BHEL, the administrative ministry is still not ready to complete the process in this company.
Meanwhile, on Monday, Engineers India’s share rose over two per cent to close at Rs 239.80 on the BSE.
The Government sold part of its share in this company first during 1994-95 (Rs 67.53 crore) and later during 2010-11 (Rs 959.65 crore). At the current price, it is now expected to get over Rs 750 crore.
Engineers India is an engineering consultancy company for oil & gas, metallurgy, infrastructure and other industrial projects.
During the quarter-ending September 30, 2012, the company clocked revenue of Rs 667 crore with net profit of Rs 161.25 crore.
Scooters India revival
The CCEA is also expected to take a call on reviving UP-based PSU Scooters India Ltd. “There is proposal to infuse Rs 200 crore in this company,” the official said.
Although in May 2011, the CCEA had approved selling entire Government holding in this company, this proposal was later shelved.
Meanwhile, Financial Services and Disinvestment Secretary D.K. Mittal said the Government was likely to come out with 10 per cent stake sale offer of Oil India in the second fortnight of this month, followed by NTPC’s issue in the first 14 days of February.
As part of the its Rs 30,000-crore disinvestment target for this fiscal, the Government plans to divest 10 per cent stake in Oil India, which could fetch around Rs 2,700 crore at the prevailing market price.
Besides, a 9.5 per cent stake sale in NTPC could fetch over Rs 12,000 crore. The Government proposes to divest 9.5 per cent stake in NTPC via Offer for Sale (auction) route.
Before the fiscal-end, the Government has a mammoth task to achieve the Rs 30,000-crore target set in the 2012-13 Budget. So far, it has managed to raise over Rs 6,900 crore through minority stake sale in PSUs.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.