The government will fall Rs 1,390 crore short of

its 2009-10 disinvestment mop-up target

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of Rs 25,000 crore because of NMDC pricing its follow on public issue (FPO) at Rs 300 on Monday. Retail investors and NMDC employees will get a discount of 5 per cent at Rs 285.

The government has collected about Rs 9,929 crore from sale of 8.38 per cent stake in NMDC. With this, the total proceeds from the disinvestments of five public sector undertakings in the current financial year stand at

Rs 23,610.9 crore.

This is the highest since 2003-04 when it mopped up Rs 15,547.41 crore,

Rs 1,500 crore above the target of Rs 14,500 crore.

This fiscal year’s figure may go up slightly as the government plans to add interest and dividend income of each of the companies.

“This is a significant contribution to the government kitty and it is too early to say whether the government has fallen short of target as we are still waiting for the dividends and interest income of individual companies to flow in,” said a government official.

Though the interest income is not strictly a disinvestment proceed, it will flow into the National Investment Fund, which collects all the money from the sale of government's stakes in public sector companies.

The government had garnered about Rs 8,540 crore from NTPC and

Rs 882 crore from REC

issues. Earlier in the year, the government had offloaded stake in National Hydropower Corporation (NHPC) and Oil India, collecting about Rs 4,259.90 crore.

Analysts say the recent follow-on public offer of government-owned companies did not receive adequate response mainly due to pricing issues, prompting institutions like Life Insurance Corporation (LIC) and State Bank of India (SBI) to put in large sums to bail out the issues.

In the REC issue, the portion reserved for QIBs was subscribed 4.15 times while demand from HNIs and retail investors remained tepid at 74 per cent and 12 per cent, respectively.

Similarly, NTPC almost drew a blank from retail investors. NTPC had fixed the base price at Rs 201.

The government raised Rs 2,012 crore through dilution of equity in NHPC and Rs 2,247 crore from Oil India. Besides, it got interest income of over Rs 5 crore from NTPC issue and Rs 1.25 crore from REC.

Next year's disinvestment target is about Rs 15,000 crore higher than this year at Rs 40,000 crore.

Coal India, Bharat Sanchar Nigam, SAIL and Engineers India are expected to come up with their public offers next year. Satluj Jal Vidyut Nigam issue, earlier scheduled for the current fiscal year, will now hit the market in 2010-11.