Govt to divest 10% stake in Hindustan Copper

The frenzy in PSU stocks continued this week on speculation about further disinvestment plans by the Government though shares of the state-run companies did turn a bit volatile. Reports suggested that the Government was planning to sell a 10% stake in Hindustan Copper Ltd. through a proposed follow-on public offering (FPO). The Union Mines Ministry approved selling a 10% stake in Hindustan Copper, Chairman and Managing Director Shakeel Ahmed was quoted as saying. Sunil Mitra, who is in charge of disinvestment, indicated recently that the Finance Ministry was in talks for selling a 10% stake in Hindustan Copper. The Government of India holds a 99.59% stake in Hindustan Copper at present.
A separate report said that the Government is keen to bring metals and mining companies at the front of the divestment queue, and is likely to push the initial public offer (IPO) of Satluj Jal Vidyut Nigam (SJVNL) to next fiscal year. Manganese Ore India Ltd. (MOIL) and Hindustan Copper could hit the market early next fiscal, with the Government disinvestment riding on it. The Government is looking to offload about 10% of its stake in MOIL in the company’s proposed IPO and 15-20% stake in Hindustan Copper. At the same time, reports said that the Centre was not planning any stake sale in Dredging Corporation of India and Shipping Corporation of India (SCI).
In November 2009, the Union Cabinet approved a proposal to sell at least 10% government holding in PSUs and use the proceeds for social schemes until March 2012 to cut high fiscal deficit. The Government wants profitable listed public-sector companies, where its stake is more than 90%, to have at least 10% of their shares held by the public. Prime Minister Dr. Manmohan Singh’s government also plans to sell shares in some profitable unlisted PSUs.