The govt, which has budgeted to raise Rs 41,000 cr through minority stake sale in 2015-16, would raise over Rs 1,550 crore from the Offer For Sale
New Delhi : The government’s ambitious divestment programme for the current fiscal began on a strong note with the sale of 5% stake in state-run REC getting subscribed over five times, fetching an estimated Rs 1,550 crore to the exchequer.
On strong institutional and retail demand, bids were received for over 25.24 crore shares as against 4.93 crore shares on offer, resulting in over-subscription of 5.11 times.
At the floor price of Rs 315 apiece, the government would raise over Rs 1,550 crore from the Offer For Sale (OFS). The share sale received strong response from retail and institutional investors and was fully subscribed within an hour of its opening.
The portion reserved for retail investors, who are also getting a 5 per cent discount, was subscribed 8.81 times, as per the stock exchange data.
The general category portion was over-subscribed 4.19 times. As against a floor price of Rs 315 a share for the OFS, REC shares closed at Rs 330.05, up 2.61 per cent over previous close. The government holds 65.64 per cent stake in REC.
As much as 20 per cent of the offer size was reserved for retail investors, who can bid for shares worth Rs 2 lakh. Besides, 25% of the offer would be alloted to mutual funds and insurance companies. REC is the first PSU to hit the market in the current fiscal. The government has budgeted to raise Rs 41,000 crore through minority stake sale in 2015-16.
In 2014-15, government had raised about Rs 24,500 crore through disinvestment against the target of Rs 43,425 crore. The disinvestment department has a pipeline of companies to sell minority stake to avoid bunching up of disinvestment towards the end of the fiscal. The companies which have been lined up for disinvestment include BHEL, Dredging Corporation, NALCO, IOC and NMDC.
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DoD wants EPFO to invest in CPSE ETF
New Delhi : The Department of Disinvestment has initiated talks with the Labour Ministry to persuade retirement fund body EPFO to invest a portion of its funds in exchange traded fund of PSU stocks.
“I spoke to the Labour Secretary. We are taking up with the EPFO. We have to write formally to them so that they invest in CPSE ETF. I think they will be agreeable to invest in CPSE ETF,” Disinvestment Secretary Aradhana Johri said. The CPSE Exchange Traded Fund (ETF) was set up in 2014. The basket consists of shares of 10 PSUs and provides an opportunity for investors to become part—owners of Oil & Natural Gas Corp, GAIL India, Coal India, Indian Oil, Oil India, Power Finance Corp, Rural Electrification Corp, Container Corp, Engineers India and Bharat Electronics.
When asked if the DoD also wants EPFO to participate in PSU disinvestment, she said, “I don’t don’t think they would be agreeable to it now.” Recently, Labour Ministry proposed to start with an investment of 1% of EPFO corpus into equity and related schemes and take it gradually to 5%. EPFO has corpus of about Rs 6.5 lakh crore with average annual deposit of Rs 80,000 crore.
At present, there are about 33 ETFs with AUMs of close to Rs.11,500 crore.
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