PM asks Ministries to work out stake sale plan in Bhel, CIL
Dec 03 2013 , New Delhi
"BHEL, Coal India have been asked to come back with various options. These options are buyback, dividend payments, disinvestment," Finance Minister P Chidambaram said after high-level meeting convened by Singh on disinvestment.
"Ministry of Heavy Industries, Coal Ministry (has been asked) to work out best option for raising proceeds as alternative to disinvestment. The money has to be raised through these options," he said.
The government has budgeted to raise Rs 40,000 crore from minority stake sale in PSUs in the current fiscal. With eight months of the fiscal over, it has managed to garner only over Rs 1,325 crore through stake sale in six PSUs.
According to a top government functionary, it was a review meeting wherein disinvestment plan for PSUs including Bhel and CIL was discussed.
"Their (all ministries) view was that the current market conditions are not favourable," the official said, adding, there is no plans to disinvestment in CIL and BHEL as of now.
After the meeting Coal Minister Shriprakash Jaiswal said "discussions are underway (disinvestment of Coal India) and no decision was taken."
The stake sale of Coal India (CIL) has been hanging fire for long on account of opposition from the trade unions.
Besides, BHEL disinvestment is also facing roadblocks of unfavourable market conditions as the company's share price has taken a beating since its disinvestment was approved in 2011.
The government had originally planned to divest 10 per cent in CIL, but on account of stiff opposition from Unions, it lowered it to 5 per cent or 31.58 crore shares. At the current market price of Rs 274.30 apiece, CIL stake sale could fetch over Rs 8,600 crore.
The government currently holds 90 per cent stake in CIL.
Besides, by selling 5 per cent stake or 8.28 crore BHEL shares at the current market price of Rs 158.40, the exchequer could reap in over Rs 1,300 crore.
In addition to disinvestment, the government is also looking at selling residual stake in Hindustan Zinc Ltd (HZL) and Balco.