Public offers of big-ticket PSUs to be advanced

With bourses doing well,govt plans to move larger issues ahead to get better valuations and attract more interest

Keen to cash in on the ongoing bull run in the stock markets,the government is planning to push forward disinvestment of big ticket public sector firms. As per the plan being finalised by the department of disinvestment,the initial public offer by Coal India Ltd is likely to be followed by offers by Power Grid Corporation,Steel Authority of India Ltd and Hindustan Copper Ltd over the next two months till December. Issues by other state runs firms including Manganese Ore India Ltd and Shipping Corporation of India are expected to be pushed to the next calendar year starting January 2011.

The bourses are doing well and the government is obviously keen to capitalise on this. The idea is to move the larger issues ahead so that they can get better valuations and attract more interest, a merchant banker involved in managing one of the PSU issues said.

The Rs 16,000 crore initial public offer of Coal India Ltd is scheduled between October 18 and 21,where the government will disinvest 10 per cent of its equity. The FPO of steel major SAIL is expected to raise Rs 8,000 crore through the sale of 5 per cent government stake and 5 per cent fresh equity and that by PowerGrid is also expected to raise a similar amount. These are all large issues and the government will obviously try to ensure that they do well as it is in need of money, another banker said,referring to the Rs 40,000 crore target set from disinvestment proceeds in 2010-11.

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Led by the heavy buying by foreign institutional investors,the Bombay Stock Exchanges 30-share sensitive Sensex has breached the 20,000 level. Public sector Hindustan Copper Ltd and Manganese Ore India recently filed their draft red herring prospectus with the market regulator Sebi,indicating their keenness to launch their public offers soon.

The favourable market conditions are a good omen and though there is no set calendar,public offers by a few large PSUs will hit the market by December, a disinvestment department official said. While the Centre is also planning to divest equity in oil majors ONGC and Indian Oil,their public offers could be early next year as they are yet to get Cabinet and regulatory approvals in place.

Recently,SAIL chairman CS Verma had said,We are planning to go for the FPO by early December as it will be winter vacation thereafter. In case we miss the deadline,then well try to bring it by January or early February.