Disinvestment of Coal India Ltd (CIL) Through OFS Successfully Completed;

Disinvestment of Coal India Ltd (CIL) through OFS was successfully completed today. An amount of Rs 22557.63 crore was realized through the CIL disinvestment process. This is the largest ever disinvestment among Central Public Sector Enterprises (CPSEs) which involved disinvestment of 5% of the paid-up equity of Government of India (with an option to retain additional 5% in case of oversubscription) in CIL. The total offer size (5%+5%) was totaling 63.16 crores shares. However the total bids received were for a quantity of 67.5 crores across all categories. The oversubscription to the total quantity was around 5%.

The major highlights of the issue are as under:

(i) The CIL disinvestment has attracted the largest FII participation in a Government OFS.

(ii) Out of the total shares offered for sale, 20% were allocated for Retail Investors i.e. those investors who placed bids for shares of total value of not more than Rs. 2.00 lakh. Rs 1852.55 have been received from the retail investors, the largest in any OFS so far.

(iii) Government of India offered 5% discount to Retail investors on price bid to attract more Retail Investors.

(iv) Government fixed Rs. 358/- floor price for the auction of shares which was 4.5% less than the closing price on 29.2.2015.

(v) With this divestment, the Government of India’s share in CIL would come down to 79.65%.

(vi) The total receipts accruing to the Government from the CIL disinvestment are Rs 22557.63/-

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Government Kicks off Disinvestment Programme

As anticipated, the government of India has decided to disinvest stake from blue chips public sector companies – Coal India, OnGC and National Hydro Electric Power Corporation (NHPC) to generate Rs.45,000 crores. 

However, the dates were not finalized according to media reports. The cabinet committee has finalized the decision for disinvestment on Wednesday. 

The disinvestment process move by the government would help the economy to gain further momentum, as it has been reeling under the clutches of slow down. 

The shine in manufacturing sector and down in the inflation statistics would help the boost the growth path for the Indian economy. 

In his budget, the finance minister had proposed the disinvestment receipt of Rs. 58,000 crore during the current fiscal year. The government is on the path to meet is target for the disinvestment receipts for the current year. 

The sentiment of investors would be high as the government is seen keen on bring back the growth as well as the confidence of investors.

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CCEA approves disinvestment of STC, ITDC

In a significant development, the Cabinet Committee on Economic Affairs (CCEA) has approved to disinvestment of governments stake in State Trading Corporation (STC) and India Tourism Development Corporation (ITDC), on Thursday.

The shares of the STC were tumbled at BSE on Thursday noon following the approval for disinvestment of 1.02 per cent government’s stake. The CCEA also approved to offload five percent of the stake in ITDC.

The government would generate around Rs30 crores by selling its stake in these corporations through offer for sale route.

Currently, the government of India has 92.11 per cent stake in ITDC and 91.02 per cent stake in STC.

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March 22: SAIL Disinvestment

Finance Ministry official said that, 10.82% stakes sale in SAIL, was cleared by an inter-ministerial panel and decided that the issue will come into the markets on Friday.

Headed by finance minister Chidambaram, the empowered Group of Ministers on disinvestment, had a meeting and decided on the pricing of the share sale. Only after the close of market hours tomorrow the base price would be made public.

Keeping in view the current market price, a 10.82% stake sale could fetch government around Rs 2,500 crore.

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Disinvestment of PSUs could boost the Economy?

Indian economy has been reeling under the global slowdown and the performance of various sectors show sign of slow progress. The growth of 5 per cent of GDP is the lowest figures as estimated for the last fiscal year.

Need of the hours is for the strong fiscal policy and economic reform from the government and more liquidity pumping from the apex bank. The Reserve Bank of India, considering the fiscal health of the economy, moderated the cash reserve ratio and key interest rates recently.

The RBI will also add around many thousand crores rupees into the system through open market operation, which is one of the core credit policies of the apex bank. And the government also need huge amount of money that could be used in various social welfare schemes.

For that the government may favour disinvesting stakes in the Public Sector Undertakings (PSUs) in the next fiscal year 2013-14, that says there would encouragement for disinvestment policies in the days to come.

The disinvestment of stakes in PSUs has been normal process, as many previous government of India have backed and carried out major disinvestments to bail out the economy.

The successful disinvestment of stakes will help the government to generate funds to meet the requirements and support many social welfare schemes in the country.

Here is the list of companies; stakes of these companies were sold through disinvestment process in India:

• NBCC
• ONGC
• MOIL LTD.
• COAL INDIA LTD.
• POWER GRID CORP.OF INDIA LTD.
• ENGINEERS INDIA LTD.
• SJVN LTD.
• NMDC LTD.
• RURAL ELECTRIFICATION CORP.LTD.
• NTPC LTD.
• OIL INDIA LTD.
• NHPC LTD.
• SHIPPING CORP.OF INDIA LTD.,THE
• POWER FINANCE CORP.LTD.

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