Electronic ticker boards indicate the latest stock figures inside the atrium at the National Stock Exchange (NSE) in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg)

Eight Public Sector Firms Likely To Hit Capital Markets Next Financial Year

As many as eight public sector companies, including Hindustan Aeronautics Ltd. and RITES Ltd., will hit the capital markets next financial year as the government intends to unlock the real value of these firms and bring in greater accountability.

Department of Investment and Public Asset Management Secretary Neeraj Gupta said these initial public offerings will be done in a “staggered manner” depending upon the size of the issuance.

Eight companies are at different stages of preparation (for an IPO) and will enter market at an appropriate time.
Neeraj Gupta, Secretary, DIPAM

Of these, HAL has already secured a nod from market regulator Securities and Exchange Board of India for floating an IPO. The government plans to sell 10 percent stake in the defence public sector undertakings.

Besides, four PSUs — RITES, Indian Renewable Energy Development Agency Ltd. (IREDA), Bharat Dynamics Ltd. and Mishra Dhatu Nigam Ltd. (MIDHANI) — have filed their draft papers with SEBI and are awaiting its go-ahead to launch public issue.

Through RITES IPO, the government plans to sell 12 per cent stake to raise an estimated Rs 600 crore.

The government will sell 13.90 crore shares in IREDA, while 12 percent and 25 percent would be sold in defence PSUs Bharat Dynamics and MIDHANI, respectively.

In 2018-19 fiscal, the government has budgeted to raise Rs 80,000 crore through PSU disinvestment, which includes strategic sale.

The government will adopt a comprehensive approach in going about its disinvestment mandate.
Neeraj Gupta, Secretary, DIPAM

In the current financial year ending March, the government has already raised over Rs 23,600 crore by way of IPOs in four companies.

As much as Rs 11,372 crore has been raised from General Insurance Corporation of India Ltd., Rs 9,600 crore from The New India Assurance Co Ltd., Rs 1,442 crore from Cochin Shipyard Ltd. and Rs 1,200 crore from Housing & Urban Development Corporation Ltd. (Hudco).