The disinvestment target for 2015-16 can be divided into Rs 41,000 crore from minority stake sale in listed public sector undertakings (PSUs) and Rs 28,500 crore from what the Budget termed “strategic sales”.
While Johri declined to name the companies in the pipeline, those in queue for a 5-10 per cent stake sale might include Nalco, NMDC, NHPC, Bhel, Nevyeli Lignite, Indian Oil, Dredging Corp, CONCOR, Rashtriya Chemicals and Fertilizers, Hindustan Copper and ONGC. This is based on the names that have come before the Cabinet in the past few months and the list of companies in which the Centre holds more than 75 per cent stake (which it will have to bring below that threshold by 2017, according to Securities and Exchange Board of India guidelines).
On ONGC, Johri said the exploration and production behemoth wasn’t ready for stake sale yet, adding the government would consider it only after a subsidy-sharing mechanism between upstream companies and the Centre was finalised and oil prices rose. “As far as ONGC is concerned, it is a stock that is not ready for disinvestment today. It is one that has come down considerably in value and there are issues of subsidy sharing. When we met investors during the ONGC road show, they didn’t just ask about what the company would pay in underrecoveries, but also the road map for that.”
As part of its 2014-15 disinvestment road map, the government had planned to sell five per cent stake in ONGC. However, that was shelved due to depressed global crude oil prices and delays in the proposed subsidy-sharing mechanism between the government and upstream companies.
Johri also sounded a word of caution on the other companies in the pipeline. “There is limited elbow room to sell because if you look at the composition of our pipeline, almost half the stocks are mines and metals, for which the markets are down globally. And, about 25 per cent of the stocks are oil stocks, where there are issues of subsidy sharing and market conditions,” she said.
On strategic disinvestment, she said this was a statement of intent by Finance Minister Arun Jaitley, following which the government was considering all options before it.