Disinvestment in FY10 and FY11.

The disinvestment secretary Sunil Mitra said that the government was likely to mop up more than Rs 24,000 crore in fiscal 2010. The primary route for this fund raising will be through initial public offers, or the listing-led approach, rather than follow ons. "FPOs (folow on public offers) will happen only if companies need money.

The objective is to unlock greater shareholder value in the government’s public sector undertakings (PSU) and that is probably going to be the main thrust. if there are listed companies that wish to go to the market and raise money and go for FPOs, then nobody is going to stop them really.

IPO’s expected in FY11 – BSNL and Coal India. One of the most awaited ones in the Public sector. Divestment of Engineers India Ltd (EIL) should happen by FY11. SAIL (Steel Authority Of India), which is need of funds will also tap the equity market in FY11 by FPO (Follow On Public Offer).

Under the disinvestment policy, 50 unlisted companies with a positive net worth and profit for three years, and 18 listed companies that have less than 10% floating equity, would tap the market. With an ambitious government-backed line-up, the stock market could see 17-18 such issues in next fiscal year and an equal number the following year.

The government action plan for PSU disinvestment, which is expected to be in place by March, would aim for no more than a three-week gap between two PSU issues.

NTPC Ltd, National Mineral Development Corporation (NMDC), Satluj Jal Vidyut Nigam Ltd (SJVNL) and Rural Electrification Corporation (REC) would be going to the market before March 31, 2010. Steel Authority of India, MMTC Ltd, Coal India and BSNL are the next to see the dilution of government stake by 10% in 2010-11.

Disinvestment expected in 2010:

Companies with Government Holding of More than 90%:

Companies with Government Holding of 80 - 90%:

Thanks,

Nimesh.

Source: Moneycontrol.com, Articles.

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