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Can The Government Meet Its PSU Disinvestment Target?
The Centre is looking to raise Rs 30,000 crore by selling stakes in state-owned companies

Nick Paulson Ellis
Country head (India), Espirito Santo Securities

There is the great fear of a country downgrade and if the government doesn’t take steps quickly on the divestment side it will end with a fiscal deficit of nearly 6% against the targeted 5.1% of GDP. So, it has a strong incentive to push through the divestment process. Secondly, the market has responded very well to the flurry of reforms. There is good liquidity in the market on the back of robust flows from foreign institutional investors. The thing to watch out for is whether the government goes back on its decision or not. It has happened before, where positive steps were taken by the government, only to be called back. If the government is able to sustain the reform initiatives then it can raise the targeted amount.

Gautam Trivedi
MD and head of equities, Religare Capital Markets

The target looks ambitious given that the government has to start the process of selecting the lead bankers for the deal. Secondly, the window for executing deals is very small considering that you are running into the year end, which is a festive season both in India and overseas. So, practically, you can execute the deals either in November or the last quarter of the fiscal. You can’t have Rs 30,000 crore of deals bunched in such a short period; you need to space it out. But more importantly you don’t have enough investor appetite for deals to go through right now, given that the global and domestic macro situation is far from stable. Realistically speaking, the government cannot raise more than Rs 10,000-15,000 crore through PSU sales in FY13.

The Inside Story

K Ramkumar, ICICI Bank

  • Sold 30,000 shares @ Rs 1,051.82 per share

Prakash B Shah, Financial Technologies

  • Sold 9,000 shares @ Rs 983.82 per share
  • Holds 0.08% stake*

BB Chatterjee, ITC

  • Sold 50,000 shares @ Rs 271.52 per share
  • Holds 0.0027% stake*

Amrita Sahara, Ruchi Soya

  • Sold 100,000 shares @ Rs 71.88 per share
  • Holds 0.75% stake*

R Shridhar, Shriram Transport Finance

  • Bought 4,500 shares @ Rs 622.60 per share
  • Holds 0.02% stake*

Vandana Naresh Patil, Kolte-Patil Developers

  • Bought 3,500 shares @ Rs 44.90 per share
  • Holds 9.27% stake*

Note: *Promoter’s stake in personal capacity. This holding does not include other investment companies and persons acting in concert. Insider trades from September 28-October 11

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