EGoM fails to decide on ONGC, BHEL stake sale, to meet again

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With just one-and-half months left to meet the Rs 40,000 crore disinvestment target for this fiscal, a panel of Ministers on Wednesday failed to take a decision on stake sale of blue chip oil major ONGC and engineering giant BHEL and decided to meet again to take a final call.

"(The government is) considering auction route for ONGC (disinvestment). No time line fixed as yet. Empowered Group of Ministers (EGoM) to meet again shortly," Petroleum and Natural Gas Minister, S. Jaipal Reddy, told reporters after the meeting of the EGoM here.

As regards BHEL, Heavy Industries and Public Enterprises Minister Praful Patel said, "no decision on BHEL disinvestment. May happen next fiscal."

The EGoM, which met under the chairmanship of Finance Minister Pranab Mukherjee, was slated to take a call on stake sale in the two major PSUs with a view to garnering about Rs 14,500 crore in the current fiscal itself.

The government in the budget for 2011-12 had envisaged to raise Rs 40,000 crore through PSU disinvestment, but in over 10 months it could mop up only Rs 1,145 crore from stake sale in the Power Finance Corporation (PFC).

The target of Rs 40,000 crore, according to Disinvestment Secretary Mohammad Haleem Khan, 'is now almost impossible (to meet)'.

He further said that a final picture with regard to raising funds from disinvestment in the current fiscal would emerge after the next meeting of the EGoM.

The government is, however, hopeful that NBCC disinvestment might go ahead in the current fiscal, but that would only fetch Rs 250 crore.

The government has been considering selling 5 per cent government stake in ONGC to raise about Rs 12,000 crore through the auction route. It owns 74.14 per cent stake in ONGC and proposed to offload 427.77 million shares or 5 per cent equity.

In case of BHEL, the proposal is to offload 10 per cent government stake in the state-owned company with a view to mopping up around Rs 2,500 crore.

The auction route, which is being considered by the EGoM for stake sale, is aimed at allowing the government to complete the disinvestment process quickly and raise funds within the current fiscal which ends on March 31.

Sebi has already issued norms allowing promoters to sell stake by way of auction, through a separate window on the BSE and the National Stock Exchange, which has to be completed within a day.

The share price of ONGC rose 1.78 per cent to Rs 280.90 during the mid-day trade on BSE, while BHEL shares were up 2.45 per cent at Rs 271.45.