NEWS ANALYSIS..................

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Rajesh Desai

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Nov 25, 2012, 11:26:57 PM11/25/12
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METALS & MINING

 

Hind Copper Issue Raises Doubts 

·        Attempts to sell small stakes in SAIL and Nalco had to be put off because of disagreements over pricing. A string of successful stake sales will, the government hopes, help revive the markets, engendering a feel-good factor that will help the scam-hit Congress-led UPA government in its attempt to win a third term in the 2014 general elections.

 

·        The government had kicked off its divestment programme on Friday with the auction of a 4% stake in Hindustan Copper. Though the issue was oversubscribed, media reports indicated that the biggest subscribers were largely state-owned institutions, including the countrys largest insurer Life Insurance Corporation and public sector banks such as State Bank of India. Some individual investors did participate, but institutional participation by the private sector was meagre.Details of who subscribed to the issue are not in the public domain.

 

·        However, the finance ministry is determined to push  ahead with disinvestment. It will all depend on NMDC now. If there is some interest from investors, it will be able to just end the year with Oil India too. The finance ministry, which recently got cabinet approval for a 9.5% stake sale in power utility firm National Thermal Power Corporation, is hopeful of hitting the Rs 30,000-crore target. If we are able to go ahead with two blue-chip companies such as NTPC,SAIL or even Nalco, the target will be well within our reach, the official said. The NTPC stake sale may fetch the government around Rs 13,000 crore,almost half of its intended target.

 

Hind Zinc, Balco residual stake sale

·        The government is considering the option of selling its residual stake in Hindustan Zinc and Balco — two erstwhile PSUs sold to mining giant Vedanta Resources during 2001- 2003. The move is aimed at meeting the INR 30,000- crore disinvestment target for the current

 

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CA. Rajesh Desai

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