In this year's Budget, the government strategy will most likely to clearly focus on creating value for CPSEs.
The countdown to February 1 has well and truly begun. In less than 9 days, Finance Minister Arun Jaitley will table the Union Budget for FY19. Ahead of the day, that the government is gearing up for a paradigm shift as far as its divestment policy is concerned, sources have told CNBC TV18.
In the fresh budget, the government strategy will most likely focus on creating value for CPSEs (Central Public Sector Enterprises) in the new financial year and hence boosting value of government equity – the government stakes that are still held in various CPSEs.
Strategic divestment, fresh offerings may be included in the upcoming budget to evenly balance minority stake sales. According to sources, the budget will most likely to have a balanced target between strategic stake sales and minority stake sale. A couple of fresh offerings will also be there.
The Oil and Natural Gas Corporation (ONGC) and Hindustan Petroleum Corporation (HPCL) deal will also improve valuations for CPSEs. As the deal has been a mega success, it sets the stage for further consolidation and mergers among CPSEs, sources say.The buyback strategy is going to continue for those CPSEs who are not using the surplus cash for business expansion, sources added.