According to persons acquainted with the situation, India intends to sell modest holdings in state-owned companies such as the world’s largest coal miner and Asia’s top zinc producer in order to capitalise on a stock market rally and enhance income in the last quarter of the fiscal year.
According to the report, the sale of small stakes in state-owned enterprises will fuel a stock market boom and boost revenue in the fiscal year’s final quarter.
The government is aiming to sell 5%-10% stakes in Coal India Ltd, Hindustan Zinc Ltd, and Rashtriya Chemicals and Fertilizers Ltd through the so-called offer-for-sale procedure, according to persons who asked not to be identified since the facts aren’t yet public. They stated that five enterprises, including a listed corporation within the railway ministry, might be picked.
According to Bloomberg calculations, sales at the lower end of the spectrum may net the government 165 billion rupees ($2 billion) at present pricing. Local equities are at an all-time high, underpinned by a robust rate of economic development, and the funds collected will assist Prime Minister Narendra Modi’s administration cover its subsidy bill, which has risen in part due to the Ukraine conflict.
Moneycontrol was unable to independently confirm the report. According to Moneycontrol, the Union Cabinet authorised the sale of the government’s full share in Hindustan Zinc Limited in May of this year.
Hindustan Zinc was a firm that was mainly controlled by the government. The government had already sold a 26 percent share in the company in 2002, which was purchased by Anil Agarwal’s Vedanta Group. The mining conglomerate eventually increased its share in the firm to 64.92 percent. According to the sources, roadshows have begun to gauge investor interest in the share sales. The Finance Ministry’s representative could not be reached for comment.
Coal India has risen nearly 46% in the last year, while Rashtriya Chemicals has gained 58%, above the benchmark S&P BSE Sensex’s 6% increase.
Meanwhile, in keeping with its divestment objectives, the government intends to make four major bids for sale – Coal India, NTPC, Hindustan Zinc, and RITES – within the next four months, according to CNBC-TV18.
According to other media reports, the government plans to sell 10-20% of its share in Rashtriya Chemicals Fertilizers (RCF) and National Fertilizers (NFL) this year.
The disinvestment objective for 2023-24 might be set at roughly Rs 65,000 crore, according to Financial Express (FE). According to statistics on the website of the Directorate of Investment and Public Asset Management (DIPAM), it has collected more than Rs 24,000 crore in disinvestment revenues so far this fiscal year.