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Way paved for 10% sale of HUDCO shares.

THE CABINET on Wednesday approved the proposal for disinvestment of 10 per cent stake in the state- owned Housing and Urban Development Corporation ( HUDCO).

The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi has given its approval for disinvestment of 10 per cent paid- up equity of Housing and Urban Development Corporation ( HUDCO), an official statement said.

CCEA also approved allowing a price discount of up to 5 per cent on the issue price to retail investors and HUDCO employees.

The actual discount to them will be approved by the alternative mechanism based on recommendations of a high level committee of officers, the statement added. The paid- up equity capital of HUDCO, with a net worth of Rs 7,800 crore, is Rs 2,001.90 crore as on March 31, 2015. The face value of each HUDCO share is Rs 10 at present.

The government has set a disinvestment target of Rs 56,500 crore for this fiscal. Of this, Rs 36,000 crore is to come from minority stake sale in public sector companies and Rs 20,500 crore from strategic sales. The government has already kickstarted the disinvestment programme for the current fiscal with 11.36 per cent stake sale in NHPC, which fetched Rs 2,700 crore.

It has shortlisted as many as 15 publiv sector , including Coal India, NMDC, MOIL, MMTC, National Fertilisers, NALCO and Bharat Electronics, for divestment in 2016- 17.

During 2015- 16, the government managed to notch up Rs 25,312 crore through disinvestment, less than half the target of Rs 69,500 crore.

The government had raised around Rs 24,500 crore in 2014- 15 by selling stake in public companies, about Rs 16,000 crore in 2013- 14 and Rs 23,960 crore in 2012- 13.

It had raised around Rs 14,000 crore in 2011- 12 and over Rs 22,100 crore in 2010- 11.

The government has been missing its disinvestment targets in recent years as the markets have very often being turning volatile at the time of the proposed sales.

Since the shares cannot be dumped at low prices some disinvestments have had to be deferred.

Retail investors will get 5% discount on share price

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Publication:Mail Today (New Delhi, India)
Date:Jun 16, 2016
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