LIC not saving PSU divestment; FIIs major investor: FinMin

Finance Ministry today said bulk of investment in government's stake sale in PSUs in 2012-13 fiscal came from foreign institutional investors (FIIs) and that LIC is not salvaging the disinvestment programme.

During the year 2012-13, the government divested stake in seven PSUs through the offer for sale (OFS) route and raised about Rs 23,830 crore.

"39 per cent of this amount came from FIIs. Only about 25 per cent came from insurance companies, including LIC, and less than 10 per cent from banks," an official statement said.

The government raised Rs 22,087 crore from the four big issues-- Oil India, NMDC, NTPC and SAIL. Of this 42 per cent was invested by the FIIs, 22 per cent by insurance companies and 9 per cent by banks.

"Government while deciding the pricing of a particular offering take into consideration factors like the strength of the Company, market conditions, investor interest, and participation of all categories of investors and fix a very reasonable level of price," the statement said.

Given the inherent strength of the Government Companies, long-term investors' participation is good in Government Issues - whether FIIs or Domestic Institutions like LIC, it added.

The government has set a target of raising Rs 40,000 crore through PSU stake sale. So far in the current fiscal it has raised over Rs 800 crore through stake sale in two PSUs-MMTC and Hindustan Copper.