DISINVESTMENTS
A PRIMER
Presentation to Sr.PCS Officers
U.P Academy of Administration &
Management
Prithvi Haldea
PRIME Database
21 July 2010
Definition of Disinvestment
• Investment refers to the conversion of money or
cash into securities.
• In reverse, disinvestment involves the conversion
of securities into cash.
• It is also referred to as ‘divestment’ or
‘divestiture.’
• In most contexts, disinvestment typically refers to
sale by the government, partly or fully, of a
government-owned enterprise.
Disinvestment v/s Privatisation
• These are often used interchangeably. There is,
however, a vital difference between the two.
• Disinvestment may or may not result in
Privatisation.
• When the government retains 26% shares, it
would have disinvested, but would not have
‘privatised’, because with 26%, it can still stall all
special resolutions for which three-fourths majority
is required.
PSUs-The Background
• In 1947, when India became independent, there
were various socio-economic problems which
needed to be dealt with in a planned and
systematic manner.
• India was primarily an agrarian economy with a
weak industrial base, low level of savings,
inadequate investments and lack of infrastructure
facilities.
• There existed considerable inequalities in income
and levels of employment, glaring regional
imbalances in economic development and lack of
trained manpower.
• As such, the State’s intervention in all the sectors
of the economy was desirable and inevitable since
private sector neither had the resources,
managerial and scientific skill, nor the will to
undertake the risks associated with large, longgestation investments.
• It became a pragmatic compulsion to use the
public sector as an instrument for self-reliant
economic growth.
• A large number of enterprises were also created
out of "sick units" taken over from the private
sector, inter alia, to protect the interests of the
workers.
Disinvestment PolicyBackground
• The new economic policy initiated in July 1991
clearly indicated that PSUs had shown a very
negative rate of return on capital employed.
• Inefficient PSUs had become and were continuing
to be a drag on the government’s resources
turning to be more of liabilities to the government
than being assets.
• Hence, the need for the government to get rid of
these units and to concentrate on core activities
was identified.
• The government also took a view that it should
move out of non-core businesses, especially the
ones where the private sector had now entered in
a significant way.
• Finally, disinvestment was also seen by the
government to raise funds for meeting
general/specific needs.
Benefits of Disinvestment
For the Government
• Raising valuable resources for the government
which could be used to bridge the fiscal deficit and
also for various developmental projects.
• The government can focus more on core activities
such as infrastructure, defense, education,
healthcare, and law and order.
For the PSUs
• Greater autonomy leading to higher efficiencies
For the Markets and Economy
• Brings greater efficiencies for the economy and
markets as a whole
For the Taxpayers
• Letting go of these assets is best in the long term
interest of the tax payers
• Unlocking of shareholder (in this case the citizens
of India) value
For the Employees
• Greater opportunities and avenues for career
growth
• Monetary gains through ESOPs and preferential
issue of shares
• Pay rises, as has been seen in past divestments
Different Approaches to
Disinvestments
Complete Privatisation
• Complete privatisation is when 100% control of a
company is passed on to a buyer.
• Most recently, this was done in 2003-04 (eg.18
hotel properties of ITDC and 3 hotel properties of
HCI). Such sales have invited a lot of criticism as
these are marred with allegations of favouritism.
Majority Disinvestment
• Government retains a minority stake in the
company
• Historically, majority disinvestments have been
typically made to strategic partners.
• These partners could be other CPSEs themselves
(BRPL to IOC, MRL to IOC, KRL to BPCL).
• These can also be private entities (Modern Foods
to Hindustan Lever, BALCO to Sterlite, CMC to TCS
etc.). Such sales have also invited a lot of criticism
for the same reason as that for Privatisation.
Minority Disinvestment
• The government retains a majority stake in the
company.
• Examples of minority sales via auctioning to
institutions go back into the early 90s (Andrew
Yule & Co., CMC etc.)
• The present government’s policy is that all
disinvestments would only be minority
disinvestments via Public Offers.
• Several minority sales done via Public Offers
(Power Grid, REC, NTPC, NHPC etc.)
Types of CPSE Disinvestments
1. Strategic Sale to Private Entity
Transactions involving sale of shares held by the
government in CPSEs, including subsidiaries of
CPSEs, along with transfer of management control,
to a strategic private partner identified through a
process of competitive bidding and subsequent sales
to the partner through call/put options
2. Public Offer Transactions
Involving sale of shares held by the government in
CPSEs through a Public Offer
3. CPSE to CPSE Sale
Transactions involving sale of shares held by the
Government in one CPSE to another CPSE
4. Auction to Financial Investors
Transactions involving sale of shares held by the
government in CPSEs through an auction to defined
financial investors/investor groups like public sector
financial institutions
5. Auction to Private Entities
Transactions involving sale of shares held by the
Government in CPSEs through an auction to private
entities
6. Sale To Employees
Transactions involving sale of shares held by the
government to employees of the respective CPSEs
DisinvestmentsA Historical Perspective
1991-92 to 2000-01
• The change process in India began in the year
1991-92, with 31 selected PSUs disinvested for
Rs.3,038 crore.
• However, against an aggregate target of Rs 54,300
crore to be raised from PSU disinvestment from
1991-92 to 2000-01, the Government managed to
raise just Rs 20,079 crore in a 10-year period.
The reasons for such low proceeds from
disinvestment against the target were:
- Unfavorable market conditions
- Offers were not attractive for private sector
investors
- Lot of opposition on the valuation process
- No clear-cut policy on disinvestment
- Strong opposition from employee and trade unions
- Lack of transparency in the process
- Lack of political will
2001-02 to 2003-04
• This was the period when maximum number of
disinvestments took place.
• These took the shape of either strategic sales
(involving transfer of control and management to a
private entity) or a public offer, with the
government still retaining control of the
management.
An amount of Rs. 5,921 crore was realized through
strategic sale. Some of the companies which
witnessed a strategic sale included:
•
•
•
•
•
•
•
•
•
•
Bharat Aluminium Co.Ltd.
CMC Ltd.
Hindustan Zinc Ltd.
Hotel Corp. of India Ltd.
HTL Ltd.
IBP Co.Ltd.
India Tourism Development Corp.Ltd.
Indian Petrochemicals Corp.Ltd.
Marti Suzuki India Ltd.
Modern Food Industries (India) Ltd.
• In addition, public offers led to divestment
proceeds of Rs. 15,128 crore.
• The total disinvestments proceeds in this 3-year
period were Rs. 21,163 crore.
2004-05 to 2008-09
• The issue of PSU disinvestment remained a
contentious one through this period, courtesy the
Left. As a result, the disinvestment agenda
stagnated.
• In this 5 year period, total receipts from
disinvestments were only Rs. 8,516 crore and all
through public offers.
2009-10 onwards till date
• A stable (minus Left) government has led to a
renewed thrust on disinvestments.
• The President of India’s address on 4th June 2009
stated: “Our people have every right to own part
of the shares of public sector companies while the
government retains majority shareholding and
control. My government will develop a roadmap for
listing and people-ownership of public sector
undertakings while ensuring that government
equity does not fall below 51%.”
• The subsequent Union Budgets have also taken
disinvestment on the agenda of the government.
• The government has also announced its intentions
of raising the minimum public shareholding in
listed companies to 25%. This, besides bringing
more quality paper in the market, shall also lead to
huge disinvestment. At current prices, this could
mean Rs. 1,20,000 crore.
• The government has started the process by selling
minority stakes in listed and unlisted (profitmaking) PSUs through public offers.
• There has also been 1 CPSE to CPSE sale.
• Till date (in just one and a quarter year),
Rs. 24,615 crore has already been raised through
disinvestments.
Total Disinvestments Proceeds till date
Period
No.Yrs. Amount
1991-92 to 2000-01 10
20079
2001-02 to 2003-04
3
21163
2004-05 to 2008-09
5
8516
2009-10 to present
1.25
24615
Total
19.25
74374
(Rs.crore)
Summary of CPSE
Disinvestments
YEAR
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
TOTAL
STRATEGIC PUBLIC OFFER CPSE TO AUCTION AUCTION
SALE TO
SALE TO
(EXCLUDING
CPSE
TO
TO
EMPLOYEES
PRIVATE FRESH CAPITAL
SALE
FINANCIAL PRIVATE
ENTITY
RAISING)
INVESTORS ENTITY
3038
1913
4843
168
105
554
2089
2336
342
380
910
784
1020
4183
459
1317
1154
405
25
12
15128
2700
77
65
2
1568
1814
5427
21306
1063
45105
2367
2247
9360
14301
77
104
TOTAL
3038
1913
0
4843
168
380
910
5371
1585
1871
3268
2348
15547
2765
1570
0
4181
0
23553
1063
74374
Annual CPSE Disinvestment
Target vs. Achievement
YEAR
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
TARGET
ACHIEVED ACHIEVEMENT
(Rs. crore) (Rs. crore)
(%)
2500
3038
122
2500
1913
77
3500
0
0
4000
4843
121
7000
168
2
5000
380
8
4800
910
19
5000
5371
107
10000
1585
16
10000
1871
19
12000
3268
27
12000
2348
20
14500
15547
107
4000
2765
69
0
1570
N.A.
0
0
N.A.
0
4181
N.A.
0
0
N.A.
25000
23553
94
40000
1063
3
DisinvestmentsThe Road Ahead
• Given the current political and social compulsions,
complete privatisation or majority sale have been
discarded.
• Offloading a part of the government’s equity by
way of a minority stake sale is the only workable
option.
• Offloading minority stakes to private players would
not make sense as valuations will be poor (since
the government shall still retain control)
Hence, best route is minority stake sale via a
Public Offer which has several benefits.
For the Government
• Benefit of capital appreciation, courtesy market
valuation of the enterprise
For the PSU
• Listing leads to better and timely disclosures,
bringing in greater transparency and
professionalism
• Greater efficiency by way of being accountable to
outside shareholders and media/analysts
• Listing provides an easier opportunity to raise
capital from the market to fund new
projects/undertake expansions/diversifications and
for acquisitions.
• Listing raises a company's public profile with
customers, suppliers, financial institutions and the
media. A listed company is typically covered in
analyst reports and may also be included in one or
more of indices of the stock exchanges.
• Wide investor base also helps prevent market
manipulations.
For the Markets and Economy
• PSU IPOs present the best opportunity of widening
the retail investor base. (In UK, the shareholding
population increased from 4% to 25%.)
For the Employees
• Though there could be opposition from employees
of some PSUs, this can be countered and also
turned into a favourable situation by offering
ESOPs/preferential issue of shares to them. This
would provide tangible monetary benefits to them,
and also make them an interested party in better
performance of their companies.
CPSE Public Offerings
• First disinvestment by way of public offer took
place in 1995-96. Since then, Rs. 45,105 crore has
been raised through PSU disinvestments from the
capital market.
Did you know?
• PSUs constitute 31% of the total market
capitalisation of companies listed at BSE
• The PSU with the highest market capitalisation is
ONGC at Rs. 2,82,417 crore (as on 30 June 2010)
• VSNL was the first PSU to be divested by way of a
Public Offer in 1999-00
• ONGC Public Offer (FPO) in 2004 was the largest
ever by a PSU, raising Rs. 10,542 crore
• NHPC Public Offer in 2009-10 has been the
largest PSU IPO raising Rs. 6,039 crore
• Power Finance Corp.’s IPO in 2006-07 was the
largest oversubscribed IPO, oversubscribed by
76.76 times
• Power Trading Corp.’s IPO in 2003-04 received
the best-ever response from retail, with the retail
portion getting oversubscribed by over 40 times
• The maximum amount raised by PSUs from the
capital market in any year was Rs. 31,082 crore in
2009-10. The maximum amount raised through
disinvestments from capital market in any year
was Rs. 21,306 crore also in 2009-10
• The maximum number of applications received in
an IPO/FPO since 2003-04 was in NTPC (14.40
lakhs) followed by NHPC (13.14 lakhs)
SLPE Disinvestments
• There has been only one SLPE disinvestment
through public offers.
Disinvestments by SLPEs
SNO.
1
COMPANY
(NAME AS AT THE TIME OF DISINVESTMENT)
GUJARAT MINERAL DEVELOPMENT CORP.LTD. (IPO)
DATE/
% STAKE
MONTH-YEAR DISINVESTED
14/10/1997
26
AMOUNT
REALISED
(Rs. crore)
107
107
Fresh Capital Raising by CPSEs
• In addition to disinvestments, CPSEs have also
been raising fresh capital-either on a standalone
basis or in conjunction with the disinvestment
offer.
• Rs. 37,505 crore of fresh capital has been raised
by various PSUs till date.
Year-wise Amounts raised in
PSU Public Offers
YEAR
1990-1991
1991-1992
1992-1993
1993-1994
1994-1995
1995-1996
1996-1997
1997-1998
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
GRAND TOTAL
DIVESTMENT
(Rs.crore)
187
107
75
15128
2684
301
1814
21306
1063
42667
FRESH
CAPITAL
(Rs.crore)
ISSUE
AMOUNT
(Rs.crore)
107
7
325
695
710
2031
1752
482
142
400
361
164
773
1435
6020
6394
1779
4152
107
7
325
695
710
2219
1752
570
142
475
361
164
773
16563
8704
7358
1779
5966
9776
31082
1063
80815
37505
Fresh Capital Raising by SLPEs
• SLPEs have also been raising fresh capital through
public offers.
Public Offers by SLPEs
SNO.
COMPANY
(NAME AS AT THE TIME OF ISSUE)
OPENING
DATE
ISSUE
AMOUNT
(Rs.crore)
SLPEs at the time of Issue (SLPEs defined as companies where the
direct holding of the
1
GUJARAT INDUSTRIES POWER CO.LTD.
13/10/2005
200
2
GUJARAT MINERAL DEVELOPMENT CORP.LTD.
14/10/1997
88
3
GUJARAT STATE FINANCIAL CORP.LTD.
11/02/1997
47
4
GUJARAT STATE PETRONET LTD.
24/01/2006
373
5
HARYANA FINANCIAL CORP.LTD.
18/05/1995
20
6
OPTEL TELECOMMUNICATIONS LTD.
30/06/1995
44
7
PUNJAB COMMUNICATIONS LTD.
24/10/1994
105
8
PUNJAB WIRELESS SYSTEMS LTD.
27/10/1993
15
9
TAMIL NADU NEWSPRINT & PAPERS LTD.
27/11/1995
220
SUB TOTAL
1112
Some Arguments against
Disinvestment
The Government will forego dividends on the equity
holdings by selling off its stakes. (CPSEs contributed
Rs. 19,423 crore to the Central exchequer in 200708 as dividends).
Apart from generating a one-time sale amount,
a lot of these part stake sales have also
resulted in huge capital gains.
Only 0.5% of Indian households invest in equities.
Thus, in case the public offer route is followed, it
would imply transferring the common ownership of
the PSUs by all Indians into the private ownership of
0.5% of Indians.
While the current equity penetration remains
low, it is precisely these PSU IPOs that present
the best opportunity of widening the retail
base.
Using funds made available from disinvestment to
bridge the fiscal deficit is an unhealthy and a short
term practice (selling ‘family silver’ to meet short
term monetary requirements).
Letting go of these assets is best in the long
term interest of the tax payers as the current
yield on these investments in abysmally low.
Profit making PSUs should not be disinvested as they
are performing well in any which way.
A good example against this criticism is BALCO
which was a profit making company that
earned the government an average dividend
(over 8 years) of Rs. 5.69 crore every year on
the equity sold. The government postdisinvestment, however, started getting
Rs.82.65 crore every year. Similarly, Maruti
gave average returns to the tune of Rs. 13 crore
annually to the government and IPCL gave
Rs. 16.24 crore on equity sold against Rs.242
crore and 149 crore respectively postdisinvestment.
Employees of PSUs would lose jobs
These fears have been found to be imaginary.
Public Offer being the chosen approach for
Disinvestments does not yield the best realisation
and is a far too time consuming process. Auctioning
to financial institutions (QIBs) should be the
preferred modus operandi.
The government should look at the greater
good and sell these stakes by public offers to
increase retail participation in the capital
markets as well as to increase the depth and
width of the capital markets. In any case, the
loss is minimal as very small stakes are being
sold.
The real gains for the government lie in the
appreciation post-listing. Let us look at the PSU
IPOs since 2004. The value of the government
holding, courtesy the market, has gone up
nearly 3 times from Rs. 80791 crore on the
issue date to Rs.2,37,366 crore.
International Models of
Disinvestment
UK
• The Margaret Thatcher government, spread over
11 years, went on an aggressive disinvestment
spree in the 1980s in the UK, borne out of the
conviction that the government had no business to
be in business.
• It let loose most of its stake at one go. British
Telecom, British Airways, British Power, British
Petroleum, British Gas, British Rail and Regional
Water Boards are just a few examples.
• During its first wave of large-scale privatisation,
UK witnessed about 670 PSUs worth US$ 5.3
billion being privatised with the water companies
fetching over US$10 billion, British Gas about
US$13 billion, and British Petroleum over US$12
billion.
• Public offers were one of the frequently used
techniques in the UK to transfer state assets and
businesses to private ownership.
• The method was fairly successful, having increased
the shareholding population from 4% to 25%. For
example, British Telecom alone created 2.1 million
shareholders in the UK, when privatised.
Eastern Europe
• With the UK having taken the lead, the former
citadels of Socialism soon embraced the new
mantra, breaking up state monopolies and selling
them to private parties choosing to let market
forces determine their future course.
Other Countries
• Germany privatised 13,500 companies by selling
off its stake in a span of two years.
• Other countries like Taiwan, Hungary, Thailand,
Philippines, Korea, Turkey, Poland, West Asia.
Zambia, Vietnam and even China similarly
marched ahead with the disinvestment program.
The future is bright…
• The potential is huge. PSUs are among the largest
and most profitable organisations in India.
• Of the total of 247 CPSEs and their subsidiaries,
only 47 are listed.
• With Public Offers having been defined as the
preferred mode of Disinvestment, a large number
of PSU IPOs/ FPOs can be expected in the future.
Imminent PSU IPOs/FPOs
SNO. COMPANY
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
STEEL AUTHORITY OF INDIA LTD.
POWER GRID CORP.OF INDIA LTD.
COAL INDIA LTD.
PTC INDIA FINANCIAL SERVICES LTD.
HINDUSTAN COPPER LTD.
RASHTRIYA CHEMICALS & FERTILISERS LTD.
NEYVELI LIGNITE CORP.LTD.
SHIPPING CORP.OF INDIA LTD.,THE
MMTC LTD.
ANDREW YULE & CO.LTD.
BHARAT SANCHAR NIGAM LTD.
NATIONAL ALUMINIUM CO.LTD.
RITES LTD.
NATIONAL FERTILISERS LTD.
MANGANESE ORE (INDIA) LTD.
IPO/ FPO ESTIMATED
AMOUNT
(Rs.crore)
FPO
FPO
IPO
IPO
FPO
FPO
FPO
FPO
FPO
FPO
IPO
FPO
IPO
IPO
IPO
4500
7500
15000
400
9000
*
2400
300
500
*
20300
3000
300
*
300
Other PSU IPOs/FPOs
SNO. COMPANY
IPO/ FPO ESTIMATED
AMOUNT
(Rs.crore)
1 AIRPORTS AUTHORITY OF INDIA
IPO
*
2 ANTRIX CORP.LTD.
IPO
*
3 BANGALORE METROPOLITAN TRANSPORT CORP.
IPO
750
4 BHARAT ALUMINIUM CO.LTD.
IPO
3000
5 BHARAT ELECTRONICS LTD.
FPO
1600
6 BHARAT OMAN REFINERIES LTD.
IPO
3850
7 BHARAT PETROLEUM CORP.LTD.
FPO
*
8 BHARAT PETRORESOURCES LTD.
IPO
*
9 CENTRAL COALFIELDS LTD.
IPO
*
10 CENTRAL INLAND WATER TRANSPORT CORP.LTD.
IPO
*
11 CENTRAL WAREHOUSING CORP.
IPO
*
12 COCHIN INTERNATIONAL AIRPORT LTD.
IPO
2500
13 COCHIN SHIPYARDS LTD.
IPO
*
14 CONTAINER CORP.OF INDIA LTD.
FPO
15 COTTON CORP.OF INDIA LTD.,THE
IPO
*
16 DAMODAR VALLEY CORP.LTD.
IPO
*
17 DPSC LTD.
FPO
*
18 DREDGING CORP.OF INDIA LTD.
FPO
*
19 EASTERN INVESTMENTS LTD.
IPO
*
20 EDCIL (INDIA) LTD.
IPO
*
21 ELECTRONICS CORP.OF INDIA LTD.
IPO
*
22 ENNORE PORT LTD.
IPO
800
23 EXPORT CREDIT GUARANTEE CORP.OF INDIA LTD.
IPO
*
24 FCI ARAVALI GYPSUM & MINERALS INDIA LTD.
IPO
*
25 FERTILISERS & CHEMICALS TRAVANCORE LTD.,THE
FPO
*
500
SNO. COMPANY
IPO/ FPO ESTIMATED
AMOUNT
(Rs.crore)
26 GAIL (INDIA) LTD.
FPO
*
27 GARDEN REACH SHIPBUILDERS & ENGINEERS LTD.
IPO
*
28 GOA SHIPYARD LTD.
IPO
*
29 GUJARAT ALKALIES & CHEMICALS LTD.
FPO
*
30 GUJARAT INDUSTRIES POWER CO.LTD.
FPO
*
31 GUJARAT MINERAL DEVELOPMENT CORP.LTD.
FPO
*
32 GUJARAT NARMADA VALLEY FERTILIZERS CO.LTD.
FPO
*
33 GUJARAT STATE ENERGY GENERATION LTD.
IPO
*
34 GURU GOBIND SINGH REFINERIES LTD.
IPO
*
35 HINDUSTAN AERONAUTICS LTD.
IPO
*
36 HINDUSTAN NEWSPRINT LTD.
IPO
*
37 HINDUSTAN PAPER CORP.LTD.
IPO
*
38 HINDUSTAN PETROLEUM CORP.LTD.
FPO
39 HINDUSTAN SHIPYARD LTD.
IPO
*
40 HINDUSTAN ZINC LTD.
FPO
*
41 HLL LIFECARE LTD.
IPO
*
42 HMT (INTERNATIONAL) LTD.
IPO
*
43 HMT LTD.
FPO
*
44 HOUSING & URBAN DEVELOPMENT CORP.LTD.
IPO
*
45 INDIA TOURISM DEVELOPMENT CORP.LTD.
IPO
*
46 INDIA TRADE PROMOTION ORGANISATION
IPO
*
47 INDIAN RAILWAY CATERING & TOURISM CORP.LTD.
IPO
*
48 INDIAN RAILWAY FINANCE CORP.LTD.
IPO
*
49 IRCON INTERNATIONAL LTD.
FPO
350
50 ITI LTD.
FPO
*
5000
SNO. COMPANY
IPO/ FPO ESTIMATED
AMOUNT
(Rs.crore)
51 KUDREMUKH IRON ORE CO.LTD.
IPO
*
52 MAHANADI COALFIELDS LTD.
IPO
*
53 MAHANAGAR GAS LTD.
IPO
150
54 MAHARASHTRA KNOWLEDGE CORP.LTD.
IPO
*
55 MAHARASHTRA STATE ELECTRICITY TRANSMISSION CO.LTD. IPO
1500
56 MAHARASHTRA STATE POWER GENERATION CO.LTD.
IPO
*
57 MAZAGON DOCK LTD.
IPO
*
58 NATIONAL AVIATION CO.OF INDIA LTD.
IPO
1200
59 NATIONAL BANK FOR AGRICULTURE & RURAL DEVELOPMENT IPO
*
60 NATIONAL BUILDINGS CONSTRUCTION CORP.LTD.
IPO
*
61 NATIONAL HIGHWAYS AUTHORITY OF INDIA
IPO
*
62 NATIONAL HOUSING BANK
IPO
*
63 NATIONAL INSURANCE CO.LTD.,THE
IPO
*
64 NATIONAL SEEDS CORP.LTD.
IPO
*
65 NEELACHAL ISPAT NIGAM LTD.
IPO
250
66 NEW INDIA ASSURANCE CO.LTD.,THE
IPO
*
67 NHDC LTD.
IPO
*
68 NORTH EASTERN DEVELOPMENT FINANCE CORP.LTD.
IPO
*
69 NORTH EASTERN ELECTRIC POWER CORP.LTD.,THE
IPO
225
70 NORTHERN COALFIELDS LTD.
IPO
*
71 NTPC ELECTRIC SUPPLY CO.LTD.
IPO
*
72 NTPC VIDYUT VYAPAR NIGAM LTD.
IPO
*
73 NUCLEAR POWER CORP.OF INDIA LTD.
IPO
*
74 NUMALIGARH REFINERY LTD.
IPO
800
75 ONGC PETRO-ADDITIONS LTD.
IPO
3500
SNO. COMPANY
IPO/ FPO ESTIMATED
AMOUNT
(Rs.crore)
76 ONGC VIDESH LTD.
IPO
*
77 ORIENTAL INSURANCE CO.LTD.,THE
IPO
*
78 PARADIP REFINERY LTD.
IPO
*
79 PAWAN HANS HELICOPTERS LTD.
IPO
*
80 PEC LTD.
IPO
*
81 PETRONET LNG LTD.
FPO
490
82 POWER FINANCE CORP.LTD.
FPO
*
83 PRASAR BHARATI
IPO
*
84 PRIZE PETROLEUM CO.LTD.
IPO
150
85 PROSEAL CLOSURES LTD.
IPO
*
86 RAILTEL CORP.OF INDIA LTD.
IPO
*
87 RASHTRIYA ISPAT NIGAM LTD.
IPO
2850
88 SCOOTERS INDIA LTD.
FPO
89 SETHUSAMUDRAM CORP.LTD.
IPO
227
90 SOUTH EASTERN COALFIELDS LTD.
IPO
*
91 STATE TRADING CORP.OF INDIA LTD.,THE
FPO
*
92 TEHRI HYDRO DEVELOPMENT CORP.LTD.
IPO
*
93 TELECOMMUNICATIONS CONSULTANTS INDIA LTD.
IPO
400
94 UNITED INDIA INSURANCE CO.LTD.
IPO
*
95 URAL INDIA LTD.
IPO
*
96 URANIUM CORP.OF INDIA LTD.
IPO
*
97 WAPCOS LTD.
IPO
*
98 WESTERN COALFIELDS LTD.
IPO
*
*
However…
We are far removed from the objective:
“Our people have every right to own part of the
shares of public sector companies while the
government retains majority shareholding and
control. My government will develop a roadmap for
listing and people-ownership of public sector
undertakings while ensuring that government
equity does not fall below 51%.”
Losses now even on PSUs !
SNO.
COMPANY
IPO
/
FPO
OPENING
DATE
INVESTOR PREMIUM OFFER
CATEGORY
(Rs.)
PRICE
(Rs.)
MARKET
PRICE
(AS ON
20.07.10)
% GAIN
/
LOSS FOR
RETAIL
1 NTPC LTD.
IPO 07/10/2004
52.00
62.00
203.10
227.58
2 POWER FINANC E C ORP.LTD.
IPO 31/01/2007
75.00
85.00
331.90
290.47
3 RURAL ELEC TRIFIC ATION C ORP.LTD.
IPO 19/02/2008
95.00
105.00
302.00
187.62
4 POWER GRID C ORP.OF INDIA LTD.
IPO 10/09/2007
42.00
52.00
99.80
91.92
5 RURAL ELEC TRIFIC ATION C ORP.LTD.
FPO 19/02/2010
302.00
48.77
6 OIL INDIA LTD.
IPO 07/09/2009
196.00
206.00
193.00
203.00
183.00
193.00
1040.00 1050.00
1335.60
27.20
7 NTPC LTD.
FPO 03/02/2010
203.10
1.04
8 SJVN LTD.
IPO 29/04/2010
23.80
-3.64
9 BHARAT EARTH MOVERS LTD.
FPO 27/06/2007
1021.80
-4.95
258.30
-9.37
30.10
-16.39
10 NMDC LTD.
FPO 10/03/2010
11 NHPC LTD.
IPO 07/08/2009
SOURCE : PRIME Database
INST.
HNI+RETAIL
EMP.
INST.
HNI+RETAIL
EMP.
INST.
RETAIL
INST.
RETAIL
192.00
202.00
191.00
201.00
181.00
191.00
16.00
26.00
14.70
24.70
1065.00 1075.00
299.00
284.00
26.00
300.00
285.00
36.00
Declining Retail Participation
PSUs-IPOs & FPOs
SNO.
1
2
3
4
5
6
7
8
9
10
11
COMPANY
NTPC LTD.
POWER FINANC E C ORP.LTD.
BHARAT EARTH MOVERS LTD.
POWER GRID C ORP.OF INDIA LTD.
RURAL ELEC TRIFIC ATION C ORP.LTD.
NHPC LTD.
OIL INDIA LTD.
NTPC LTD.
RURAL ELEC TRIFIC ATION C ORP.LTD.
NMDC LTD.
SJVN LTD.
SOURCE : PRIME Database
IPO
/
FPO
IPO
IPO
FPO
IPO
IPO
IPO
IPO
FPO
FPO
FPO
IPO
OPENING
DATE
07/10/2004
31/01/2007
27/06/2007
10/09/2007
19/02/2008
07/08/2009
07/09/2009
03/02/2010
19/02/2010
10/03/2010
29/04/2010
ISSUE
TIMES
NO.OF
AMOUNT SUBSCRIBED APPLICATIONS
(Rs.crore)
5368
13.14
1440278
997
76.76
602883
527
27.62
105667
2984
64.4
1226614
1639
25.75
742192
6039
23.53
1313244
2777
30.64
232754
8480
1.22
100798
3530
3.47
57316
9930
1.24
163354
1063
6.24
181372
Need a policy review investors
Policy needs to be reviewed in terms of
• Reservations for retail
• Pricing for retail
• Distribution methods
Coal India can get 1 crore investors
Thank you…
prithvi@primedatabase.com