The IPO of state-owned steel maker RINL is scheduled to hit the markets in the current fiscal, and the Cabinet has already accorded its approval for the stake sale.
The government on Monday said it will kickstart its ambitious Rs 30,000 crore (Rs 300 billion) divestment programme with stake sale in RINL this month.
If the proposal gets Cabinet clearance, the disinvestment is likely to follow the initial public offering of Rashtriya Ispat Nigam Ltd, for which the prospectus has already been filed with the Securities and Exchange Board of India.
Steel Ministry is unwilling to sell shares at lower than the present book value of Rs 22.50 a share. Merchant bankers UBS Securities and Deutsche Equities (India) have proposed Rs 15-17 as the price band.
A senior official from the Department of Disinvestment told Business Standard it was decided in a meeting on Thursday that the fresh date for RINL's IPO would be in the third or fourth week of July.
With general elections on the horizon, the government's privatisation bandwagon has almost but stalled as a government wary of being accused of selling family silver opts for minority stake sales on stock exchanges over outright privatisation. The result -- the divestment target for current fiscal year is again likely to be missed. Big ticket privatisation plans such as that of Bharat Petroleum Corporation Ltd (BPCL), Shipping Corporation of India (SCI) and CONCOR are already on the backburner and analysts feel meaningful privatisation can happen only after April/May general elections.
It was touted as a game changer but big-ticket privatisation has been a mixed bag as the government faces unanticipated challenges of lukewarm investor response, employee union agitation and legal hurdles. Prime Minister Narendra Modi's often-repeated statement 'the government has no business to be in business' guided the drawing up of an ambitious privatisation pipeline. While Air India sale succeeded, Bharat Petroleum Corporation Ltd (BPCL) divestment failed.
Dipam is conducting the selection of merchant bankers and legal advisors, and planning roadshows.
During the first quarter ended June, 2014-15 fiscal, LIC earned a total premium of Rs 14,016 crore.
The government's disinvestment programme is set to get a boost this Diwali, with the finance ministry planning to hit the market to sell a five per cent stake in Steel Authority of India Ltd (SAIL) by October.
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