Centre kicks off disinvestment
New Delhi, Nov 21, 2012, DHNS : 22:02 IST
Hind Copper stake sale on Friday
The government’s delayed disinvestment process will finally kick off on Friday with the offloading of 4 per cent share in the leading public sector copper producer Hindustan Copper Limited (HCL).
HCL is the first public sector company to go under the hammer this fiscal year through which the government aims to garner Rs 30,000 crore.
“HCL disinvestment will happen on Friday. The first tranche is only going to be 4 per cent,” Disinvestment Secretary Halim Khan told reporters.
The government has decided to go in for divestment in two tranches, Khan said adding, “We don’t want to flood the market with extra liquidity so we are divesting stakes in two tranches.”
The floor price for the equity sale will be decided on Friday after the stock market closes, he said. Desperate to garner target revenue from divestment, the government has also permitted the state-owned Life Insurance Corporation to invest upto 30 per cent in a company as against the prevailing rule of 10 per cent.
The new norms will enable the cash-rich LIC to pick up higher equity in state-owned companies during the disinvestment process without caring for whether the auction evokes much response from other buyers.
However, this has not gone down well with insurance regulator Irda which has publically expressed disappointment with the decision.
Post disinvestment, the government’s shareholding would come down to 90 per cent in the company.