With many public issues hitting the market in the second half of the current fiscal, the Finance Ministry has decided to defer disinvestment in the trading firm MMTC for the next financial year.
“The disinvestment in MMTC will not happen this fiscal. The stake sale in the company would be done sometime in the next year,” a Finance Ministry official told PTI.
Earlier, both Commerce Minister Anand Sharma and Commerce Secretary Rahul Khullar had said that follow on public offer (FPO) of MMTC is likely to be in the current fiscal.
He further said that the company will split its stock and announce a bonus share before the public offer.
The trading firm, in which government holds 99.33 per cent equity, has received mandatory EGM approval for splitting each share of face value of Rs. 10 into 10 scrips of Re. 1 each and issuing one-to-one bonus shares.
According to sources, the government is likely to offload 10 per cent stake in the company. MMTC is under the administrative control of the Commerce Ministry.
In spite of raising just around Rs. 2,000 crore from disinvestment in the current fiscal, Disinvestment Secretary Sumit Bose is confident to meet the budgetary target of Rs. 40,000 crore through disinvestment in 2010-11.
The target looks feasible as many issues, including over Rs. 15,000-crore CIL IPO, which opens on October 18, are expected to hit the market in the current fiscal.
“I expect Coal India IPO to do very well. There should be huge response from retail as well as institutional investors,” Mr. Bose said.
Mr. Bose further said that follow-on public offer of Power Grid is next in line and is expected to be after Diwali in November (this month).
Besides, the government will divest its stake in Manganese Ore India Limited, Hindustan Copper and Shipping Corporation of India in the current fiscal.
“The disinvestment in SAIL, ONGC and IOC is expected in the last quarter of the current fiscal,” Mr. Bose added.
Aiming to raise Rs. 40,000 crore through disinvestment this fiscal, the government has mopped up over Rs. 1,000 crore by divesting stake in Satluj Jal Vidyut Nigam, and around Rs. 1,000 crore through Engineers India FPO.
Last fiscal, it had raised Rs. 25,000 crore through stake sale in Oil India, NMDC, REC and NTPC.