Disinvestment can raise $95 b: Study


The study by Delhi-based brokerage firm SMC Capitals said as much as $94.77 billion can be raised from the sale of equity in state-run firms even if the Government retains 51 percent controlling stake.

"The current fiscal deficit is at $62.26 billion, that is about 6.23 per cent of the GDP, much lower than the amount that the Government has the potential to garner by selling the stakes up to 51 per cent in the listed PSUs only," the study said. "Though it is unlikely that the Government would divest up to 51 per cent in all listed PSUs, the value that can be unlocked from a well planned secondary public offering is huge," said SMC Capitals equity head Jagannadham Thunuguntla.

Back-of-the-envelope calculations throw up these figures: If the Government were to divest 47.38 per cent of its holdings in National Mineral Development Corp (NMDC), it would rake in about Rs.81,263 crore. Similarly, MMTC (formerly Minerals and Metals Trading Corp) would fetch Rs.75,149 crore by selling 48.33 percent to the public. ONGC, one of the largest PSUs by market capitalisation (Rs.249,778 crore) would add Rs.57,799 crore to the government's coffers by offloading 23.14 per cent.

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