The Hindu Business Line : Govt defers stake sale in BHEL, Maruti to next fiscal

THE Government has decided to defer the proposed sale of 10 per cent equity in Bharat Heavy Electricals Ltd (BHEL) and 7.5 per cent in Maruti Udyog Ltd (MUL) to the next financial year.

The Finance Minister, Mr P. Chidambaram, said that the minority stake sales in BHEL and Maruti would be considered by the Union Cabinet during a meeting slated for Thursday. Mr Chidambaram met Mr Santosh Mohan Dev, Minister for Heavy Industries and Public Enterprises, here today to discuss the issue.

"We have reached a broad agreement on the modalities for the partial disinvestment in the two companies. The mechanisms of stake sale will be decided later," Mr Chidambaram told reporters after the meeting.

The Finance Ministry had favoured partial sale of Government stake in Maruti and BHEL this fiscal in a bid to bridge the fiscal deficit.

Based on current market prices, the sale of 10 per cent stake in BHEL is expected to mop-up around Rs 1,600 crore, while sale of Maruti's shares will generate about Rs 800 crore - Rs 900 crore.

The stake sales in the two companies have been pushed to the next fiscal to fetch better prices, Mr Dev said. ``The shares in BHEL and Maruti will be sold in the next fiscal as we expect better value with BHEL likely to post good results this fiscal. Maruti's performance has also been good,'' he said.

Mr Dev said the Finance Minister has also agreed to his suggestion for reserving certain portion of the shares for the employees of BHEL. ``Some portion of the equity will be reserved for employees of these companies. The option of introducing a public issue also cannot be ruled out," he disclosed.

The money raised from sale of equity in Maruti and BHEL would be utilised for funding social sector schemes/projects and even for recapitalisation of the existing PSUs.

"Indian public and financial institutions would be given preference during the sale of shares of both the companies," he said.

The Government's holding in BHEL will be reduced to 57.77 per cent after the 10 per cent equity sale. In the case of Maruti, the Government proposes to sell its residual holding of 18.24 per cent in phases. After the initial public offering in Maruti last year, the Government's stake in the automaker has come down to 18.24 per cent. It has an option till June this year to sell its share in any manner it likes.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Reliance Info shares allotted at discounted price?

Govt defers stake sale in BHEL, Maruti to next fiscal

On track to $50-b export goal: Maran

Results provide the spark

Cos to get time to comply with public shareholding norms

New SEBI disclosure guidelines to bring down issuers' ad costs

Contributions to The Hindu Relief Fund

NTPC in talks with NPC for foray into nuclear power generation