PSU divestment likely to start with Coal India, ONGC

21/10/2014 08:13 AST

The government's disinvestment programme might start with a big issue like that of Coal India Ltd or Oil and Natural Gas Corporation Ltd (ONGC) next month, while stake sales in Steel Authority of India Ltd (SAIL) could be put on hold.

Coal India's valuation has shot up after the Supreme Court's verdict cancelling private coal blocks last month. The government's decision on Monday provided more clarity. On the other hand, SAIL's stock price has dived in the past few weeks with a rise in steel prices.

The government was earlier planning to begin this year's disinvestment with a five per cent stake sale in SAIL in September. "The stock price of SAIL has fallen sharply. So, there may be a delay there till the valuation goes up again," said a finance ministry official, who did not wish to be named.

The decks have also been cleared for divestment in ONGC, with the Union Cabinet providing clarity on gas pricing last Saturday. Disinvestment Secretary Aradhana Johri met bankers in Mumbai on Monday to discuss the sale, likely to fetch around Rs 18,000 crore to the government, against Rs 22,800 crore expected from Coal India.

The finance ministry will also approach the Cabinet soon for selling five per cent stakes in Rural Electrification Corporation and Power Finance Corporation. Finance Minister Arun Jaitley has given his approval to these.

"Coal India and NHPC may be the first to be divested. We are also in the process of taking Cabinet approval for some power companies. Now, there is clarity on ONGC, too. But nothing is likely to happen before November," another official said on condition of anonymity.

Business Standard