News Analysis

Centre raises more than half its divestment target for FY18

Radhika Merwin | Updated on January 09, 2018 Published on November 13, 2017

Already mopped up ₹25,797 cr via sale of minority stakes in CPSEs, ₹4,153 cr from strategic disinvestment



The Centre appears well-positioned to meet its disinvestment target for 2017-18, going by the data put out by the Department of Investment and Public Asset Management.

Of the target of raising ₹72,500 crore this fiscal, the Centre had, as of November 1, garnered ₹30,185 crore via disinvestment. If the New India Assurance mega issue, which closed on November 3, is included, then the Centre has raked over ₹37,000 crore so far this fiscal, that is, more than half the targeted figure.

Big money

Of the total disinvestment target for FY18, the Centre planned to raise ₹46,500 crore by selling stake in PSUs, ₹15,000 crore via strategic sales, and ₹11,000 crore by listing insurance companies. As of November 1, the Centre had raised ₹25,797 crore through sale of minority stakes in CPSEs (Central Public Sector Enterprises), and ₹4,153 crore from disinvestment of strategic holdings and income from management of SUUTI (Specified Undertaking of Unit Trust of India) investment. Add the ₹7,600 crore raised via stake sale in New India Assurance, the disinvestment mop-up totals around ₹37,865 crore.

The IPO of General Insurance Corporation of India (GIC) was another money spinner for the Centre. Paring its stake in the reinsurance company fetched the Centre a tidy ₹9,700 crore. Aside from these mega IPOs, the Centre also raised some ₹9,100 crore by selling stake in NTPC.

The Bharat-22 ETF — it will track the performance of 22 stocks the government plans to pare its stake in — which , is being rolled out this week, is expected to bring in upwards of ₹8,000 crore.

According to reports, the Centre is also lining up more PSUs for strategic sale, and the list includes names such as Dredging Corporation, Central Electronics, and Hindustan Prefab.

Of the ₹56,500-crore divestment target for 2016-17, the Centre had raised ₹46,246 crore — ₹34,938 crore through the sale of minority stakes in PSUs and ₹10,778 crore by way of strategic sale. Bulk of last year’s proceeds came from stake-sale in NHPC and NMDC, disinvestment of SUUTI Holdings in ITC, and CPSE ETFs.

Published on November 13, 2017
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