The Department of Disinvestment (DoD) has initiated the process of taking a fresh Cabinet nod for disinvesting 10 per cent equity stake in Hindustan Copper Ltd through a follow-on public offering (FPO).
If the proposal gets Cabinet clearance, the disinvestment is likely to follow the initial public offering (IPO) of Rashtriya Ispat Nigam Ltd (RINL), for which the prospectus has already been filed with the Securities and Exchange Board of India.
A senior official at DoD said consultation with the ministries and departments concerned had begun for taking the proposal to the Cabinet afresh, taking into consideration the present circumstances.
He indicated the earlier proposal, cleared by the Cabinet in 2010, was set to be revised to divest only 10 per cent of the paid-up equity capital by the government as the company didn’t require funds.
The Cabinet Committee on Economic Affairs had earlier cleared disinvestment of 10 per cent paid-up equity capital of Hindustan Copper out of the government’s shareholding, along with an issue of fresh equity of equal size by the company in June 2010.
The paid-up equity capital of the company is Rs 462.61 crore. The government is holding 99.59 per cent and the face value of each share is Rs 5.
As the plan cleared by the cabinet could not be implemented in 2011-12, the new proposal for bringing in an FPO with a reworked strategy to suit the existing situation is being taken to the cabinet again.
DoD officials said though the idea was to prefer IPOs and the auction route in the current sluggish market situation, apart from the RINL IPO, no other disinvestment case had reached implementation stage.
The government has kept a disinvestment target of Rs 30,000 crore for 2012-13 against Rs 40,000 crore in each of the two previous financial years because of the repeated failure in garnering the projected amount. Apart from RINL and Hindustan Copper, other companies lined up for disinvestment in 2012-13 include Steel Authority of India Ltd, Bharat Heavy Electricals Ltd and Oil India Ltd.