THE government will reap the maximum benefit out of the present bull run in

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capital markets. In all probability, it would mop up over Rs 60,000 crore thr ough equity sale in half a dozen bluechip oil, power and metal PSUs.

This estimated government mop-up through disinvestment would be much higher than the targeted Rs 40,000 crore for this financial year. Coal India (CIL), Steel Authority of India (SAIL), Oil and Natural Gas Corp (ONGC) and Indian Oil (IOC) are expected to contribute the largest chunk of revenues into the government's disinvestment kitty.

At Tuesday closing prices, the three proposed follow-on public offers(FPOs) from SAIL, ONGC and IOC are likely to fetch about Rs 34,079 crore, while CIL's IPO, by a conservative estimate, is expected to get Rs 15,000 crore, given the expectations from market participants that bull sentiment will continue in short term. The four issues thus could realise a total of Rs 49,079 crore.

Research head at SMC Global Securities Jagannadham Thunuguntla said, "Investors can easily absorb upcoming IPOs and FPOs as the secondary market is doing well. It seems that primary market will also run on the same path. This is an appropriate time for the government to come with public offerings. All PSU companies are quite good, as their valuations are looking very much reasonable."

At Tuesday's closing levels, government would be able to garner Rs 60,261 crore this financial year through stake sale in seven PSUs. SJVNL maiden offer in May and Engineers India FPO in August this year have already fetched Rs 2,047 crore.

The government has cleared decks for equity dilution in SAIL, Power Grid Corporation of India (PGCIL), Hindustan Copper and Manganese Ore (India). Mega issues of ONGC and IOC are yet to receive nod from cabinet committee of economic affairs. In all likelihood, both high profile FPOs will hit the market in last quarter of this financial year.

Head of research at Geojit BNP Paribas Financial Services Alex Mathews said, "Valuations of PSUs are strong and with domestic market having crossed 20,000 mark on Tuesday, we can say investors will easily absorb the upcoming public issues."

"ONGC has much value to unlock and it has much more potential. It is the right time to go for the issue. Now, government will have to take the final call on how to bunch several public issues and how will investors react to that," its CMD RS Sharma said. Boom in the market is also likely to hasten up SAIL, PGCIL and IOC issues that involve 10 per cent stake sale in each company.

IOC chief BM Bansal told Financial Chronicle that Sensex touching 20,000 would help upcoming issue of the company. "Recent hike in petrol prices also shows the freedom given to oil marketing companies by government. All these will help boost investor's confidence. Now, government has to decide on the timing of several issues. Market has lot of appetite for good issues. Investors will pick and choose the best companies that are in queue. Investors' confidence will be further build up if diesel is de-regulated. The ministry is working on it."

The divestment programme will resume with CIL that is set to launch the country's biggest IPO in October. The company will offer 63.16 crore shares through stake dilution.

"From Indian stock markets point of view, Coal India couldn't have come at a better time," a coal ministry official said. CIL chairman P S Bhattacharyya was unavailable for comments as the company is observing silent period ahead of IPO.