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EGoM Approves ONGC Stake Sale, BHEL Divestment in FY13

  • With just one-and-half months left to meet the Rs 40,000 crore disinvestment target for this fiscal, a panel of ministers on Wednesday Okayed stake sale in ONGC in this fiscal. However, divestment in BHEL is expected anytime in FY13.The EGoM, will  meet soon to decide on the date and the price at which divestment in ONGC will take place. At the current market price of Rs. 280 a piece, the stake sale would fetch the government over Rs 10,000 crore.The EGoM, which met under the chairmanship of Mukherjee, was slated to take a call on stake sale in the two major PSUs with a view to garnering about Rs14,500 crore in the current fiscal itself. Reuters
  • “(The government is) considering auction route for ONGC (disinvestment). No time line fixed as yet. Empowered Group of Ministers (EGoM) to meet again shortly”, Petroleum and Natural Gas Minister, S Jaipal Reddy, told reporters after the meeting of the EGoM here.As regards BHEL, Heavy Industries and Public Enterprises Minister Praful Patel said, “no decision on BHEL disinvestment…May happen next fiscal”.
  • The EGoM, which met under the chairmanship of Finance Minister Pranab Mukherjee, was slated to take a call on stake sale in the two major PSUs with a view to garnering about Rs14,500 crore in the current fiscal itself.The government in the budget for 2011-12 had envisaged to raise Rs40,000 crore through PSU disinvestment, but in over 10 months it could mop up only Rs1,145 crore from stake sale in the Power Finance Corporation (PFC)The target of Rs40,000 crore, according to Disinvestment Secretary Mohammad Haleem Khan, “is now almost impossible (to meet)”.
  • He further said that a final picture with regard to raising funds from disinvestment in the current fiscal would emerge after the next meeting of the EGoM.The government is, however, hopeful that NBCC disinvestment might go ahead in the current fiscal, but that would only fetch Rs 250 crore.The government has been considering selling 5 percent government stake in ONGC to raise about Rs 12,000 crore through the auction route. It owns 74.14 percent stake in ONGC and proposed to offload 427.77 million shares or 5 per cent equity. In case of BHEL, the proposal is to offload 10 percent government stake in the state-owned company with a view to mopping up around Rs 2,500 crore.
  • The auction route, which is being considered by the EGoM for stake sale, is aimed at allowing the government to complete the disinvestment process quickly and raise funds within the current fiscal which ends on March 31.Sebi has already issued norms allowing promoters to sell stake by way of auction, through a separate window on the BSE and the National Stock Exchange, which has to be completed within a day.The share price of ONGC rose 1.78 percent to Rs 280.90 during the mid-day trade on BSE, while BHEL shares were up 2.45 percent at Rs 271.45.

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