Govt to mop up over Rs 24000 cr in FY10: Divestment Secy

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The last quarter of FY10, it seems, is likely to be one of big divestments. The disinvestment secretary Sunil Mitra said in an interview to CNBC-TV18 that the government was likely to mop up more than Rs 24,000 crore in fiscal 2010.

And 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," Mitra said. The government plans to list 60 unlisted public sector units, and may even ask for dividend before divesting cash rich companies, he added.

The big one for the government, the NTPC public issue coming up next month, is likely to raise about Rs 8,000 crore, Mitra said.

Earlier, the finance minister Pranab Mukherjee had said that India will complete share sales through public offers in three state companies by the end of March. Divestment of 5% each in NTPC and Rural Electrification Corp and 10% in unlisted Satluj Jal Vidyut Nigam (SJVN) was under implementation, Pranab Mukherjee had told the lawmakers in Parliament in early December.

CNBC-TV18 had also learnt that the government was keen to push through the follow-on public offer of state-owned NMDC this fiscal. Mitra also confirmed that this FPO was likely in March.

Next, Mitra is hopeful of the BSNL IPO and Coal India IPO in FY11. Divestment of Engineers India Ltd (EIL) should happen by Q1FY11.

SAIL, which is need of funds will also tap the equity market in FY11. Earlier,  the Chairman and Managing Director SK Roongta had said in an interview to CNBC-TV18 that SAIL's FPO was likely to come in two tranches of 5% each. "We are in the process of modernisation and expansion, which involves expenditure of about Rs 60,000 crore over the next 3-4 years. We are proposing to raise about 50% of it through debt. The remaining 50% will be raised through internal accruals and equity portion. For FY10, we will have to depend upon our present and internal accruals. So, for FY10, we may not have to depend on the FPO proceeds," Roongta had said.

On sick PSUs, Mitra said the government would revisit the approach of sell-offs. Earlier, the finance minister had announced that the government did not intend to use divestment money to bring down the country's huge fiscal deficit. In fact, 25% of divestment proceeds would be used in order to revive sick public sector units, he had said.

Read full transcript of the interview on next page.