The divestment proceeds could surpass the budget target this year due to the upcoming initial public offerings of ONGC and GAIL, though the current bull phase in stock markets did not fuel the primary markets in 2003, NCAER said on Wednesday.

"The divestment proceeds this fiscal are expected to exceed the budgeted amount of Rs 13,200 crore (Rs 132 billion) due to the forthcoming IPOs of Oil and Natural Gas Corporation and Gas Authority of India," National Council for Applied Economic Research said in its latest quarterly review.

The combined IPO size of both ONGC and GAIL works out to around Rs 12,000 crore (Rs 120 billion).

About the rather subdued primary market, NCAER said though the consistent improvement in the inflow of foreign institutional investment made the BSE Sensex cross the 6,000 mark, "the sustained bull run in the secondary market, however, did not fuel the primary market in 2003."

Only 15 public issues hit the market, raising Rs 2,194 crore (Rs 21.94 billion), the economic think-tank said, adding that the situation would change in 2004 with nearly 600 companies planning to raise over Rs 50,000 crore (Rs 500 billion) through this route.

The stock markets had been witnessing hectic activity in the recent times due to increased role of both domestic and foreign investment firms.

Market regulator Securities and Exchange Board of India is considering to formulate norms for registration of hedge funds in the country to provide FIIs an investment window and improve quality of their regulation.