NTPC first among 4 PSUs lined up for FPOs this fiscal
New Delhi: Starting with power producer NTPC's FPO by early next month, four public offers of state-run companies are likely to hit the markets this fiscal which will fetch the government around Rs 30,000 crore.
According to officials close to the development, the UPA government intends to speed up the disinvestment programme in view of widening fiscal deficit which leaves very little resources to fund the government's social welfare schemes like the Mahatma National Rural Employment Guarantee Scheme.
"The Draft Red Herring Prospectus (DRHP) from NTPC is likely to be filed on Monday and expected to be cleared through fast track route for speedy clearance, so it could hit market by last week of January or first week of February," an official said.
Since NTPC is a fast track issue, it is likely to hit the market within 20-25 days. SBI and Hindalco were the only issues which were cleared on fast track, sources said.
Market regulator SEBI allows companies with good track record to go for follow-on public offer (FPO) on shorter time period after filing DRHP with the market regulator.
Rural Electrification Corporation (REC), which finances power projects in villages, is lined next after the NTPC. Sources said REC will hit the market just before Budget, which is likely to be tabled in Parliament on February 26.
Mineral giant NMDC, which has one of the lowest floating stocks, is expected to go public by around March 10. Satluj Jal Vidyut Nigam Ltd is the last go public in this fiscal.
NTPC closed 1.18 per cent higher on the Bombay Stock Exchange at Rs 230.85 on Friday, while NMDC was up 0.05 per cent at Rs 419.05.
As per the recent Cabinet decision, all profitable listed PSUs must have at least 10 per cent public holding. NMDC has just 1.62 per cent holding, which means another 8.38 per cent stake could be divested to the public.
The Cabinet also asked all unlisted profitable PSUs to list on stock exchanges. These two criteria together make around 60 PSUs eligible for disinvestment.