Himadri Buch Moneycontrol News
The Finance Ministry is confident of achieving the disinvestment target of Rs 80,000 crore set for the current fiscal, a Finance Ministry source told Moneycontrol.
With the ongoing volatile equity markets, economy watchers feel the government may miss the target by a large margin unless some alternative steps are pursued in right earnest.
Any shortfall in disinvestment target would only further worsen the fiscal deficit situation, weakening investor confidence.
“We will definitely be able to achieve the divestment program. We have reviewed and the (divestment) program will be met through buybacks and direct IPOs,” said a source from the Finance Ministry to a query on disinvestment and whether the government will be able to achieve the target set for this fiscal.
The source, however, declined to spell out the other options being pursued as the government was yet to take a final call on them.
With just over four months remaining for the current fiscal year to end, the government may push hard to achieve its disinvestment target of Rs 80,000 crore for FY19. As of now, only a fourth of the disinvestment target has been met.
According to an Economic Times report, the government plans to divest stakes of up to $2 billion in public sector undertaking (PSU) entities such as Oil & Natural Gas Corp (ONGC), Indian Oil Corp (IOC) and Oil India (OIL) to meet its disinvestment target for the year.
The companies are also expected to shell out Rs 10,000 crore by way of share buyback programs.
As part of the stake sale, the government will be looking to sell 5 percent of assets in ONGC, 3 percent in Indian Oil and about 10 percent in Oil India.
According to a regulatory filing, Oil India is considering a share buyback proposal this month. The market is also expecting ONGC and Oil India to consider similar proposals. The companies are expected to buyback shares worth approximately Rs 1,100 crore, Rs 4,800 crore and Rs 4,000 crore, respectively.
Along with buybacks in PSUs, the centre s also relying on a further fund offer under the existing CPSE-ETF, monetisation of a portion of SUUTI holdings in Axis Bank and ITC, and strategic sales of a some relatively smaller companies.
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