The new government can easily raise Rs 1 lakh crore by divesting 10 percent or
more of stake in top 10 PSUs, including ONGC, Coal India and NTPC to overcome
the immediate problems of budgetary revenue in the face of economic slowdown, a
study by ASSOCHAM has said. It said the top 10 PSUs which can be divested to
raise rich resources at today’s market capitalisation include ONGC, Coal India,
State Bank of India, NTPC, Indian Oil Corporation, NMDC, Power Grid Corporation
and BHEL. The combined market capitalisation of these companies including Bank
of Baroda exceeds Rs 11 lakh crore as the market is riding the wave of FIIs
inflows built on decisive new government. Besides the top ten, there are other
PSUs in the list of top 100 companies by market capitalisation, which can be
considered for divestment. These include several banks like Punjab National Bank
(PNB), Canara Bank and others such as the SAIL, Power Finance Corporation of
India (PFCI) and the Rural Electrification Corporation (REC). “If the results of
elections are for stable government, the market capitalization of these
companies can easily go up by another 15-20 per cent raising prospects for
better realizations for the government from minority divestment,” it said. The
number one PSU firm in terms of market capitalisation is ONGC with valuation of
about Rs 2,87,000 crore followed by Coal India – Rs 1,86,000 crore and State
Bank of India – Rs 1,55,000 crore, adds the ASSOCHAM paper. The other companies
in the government sector which can fetch the central exchequer a tidy sum
include power generating major NTPC – Rs 95,000 crore and fuel refiner and
marketing major Indian Oil Corporation – Rs 66,500 crore. “The new government
should take advantage of robust state of the stock market helped by heavy
inflows of the funds from the foreign institutional investors and help its
exchequer which faces constraint of lower tax earnings because of slowdown in
economy,” ASSOCHAM President Rana Kapoor said. In the recent run-up in the stock
market, the top-performing PSUs have been attracting a significant amount of
investor interest leading to improvement in their market capitalisation. For
instance, the State Bank of India (SBI) has witnessed a run up from Rs 1400 per
share to Rs 2,000 per share in the last few weeks
