Having managed to eke out an interim dividend of Rs 16,500 crore from Coal India ltd (CIl) and pushed both ONGC and Oil India ltd (OIl) into buying its 10 per cent stake in Indian Oil ltd (IOC) and thus garnering Rs 5,000 crore in the bargain, the UPA Government in its desperation to meet its disinvestment target is mulling a proposal to sell its 5 per cent stake in Bharat Heavy Electricals ltd (BHEl) to cash-rich State-owned entities or financial institutions.
Sources privy to the development indicated to The Pioneer that though no final decision has been taken on the matter, selling Government’s 5 per cent stake in the equipment making company to cash-rich banks or other Maharatna PSUs.
They added that the Heavy Industry Ministry is said to be looking at possible PSUs mainly Maharatna companies which could be approached to buy out the Government’s stake in BHEl. At the same time, even cash-rich banking institutions too are being looked at for the purpose.
The exercise is being undertaken by the Heavy Industry Ministry along with the Power Ministry after the Finance Ministry asked them earlier this month to look at the option of selling the Government’s 5 per cent share to other PSUs or even banking institutions.
It would be too early though to name any specific entity which could be singled out for the purpose, sources said, even as the stake sale exercise is likely to be conducted within the next 10 days as the Winter Session is likely to begin from February 5, 2014. The Government is keen to wrap up this exercise prior to this as once the session ends on February 21, the announcement of dates of lok Sabha polls is likely to follow soon.
BHEl’s disinvestment has been hanging fire since 2011 as on previous occasions when efforts were made to launch its stake sale, the exercise had generated a lot of negative sentiments among global investors which reflected in its gradually depleting share price. Its share price ended up trading at Rs 166.6 on Friday and owing to its consistently low share price over the last two years, the Heavy Industry Ministry has not been too keen on its disinvestment.
Despite the poor performance of BHEl’s share in the markets, insiders are hoping to rope in some cash-rich PSUs into buying Government’s share in the heavy equipment maker, mainly due to its ‘Maharatna’ tag. Owing to Heavy Industry Ministry’s reluctance to sell off BHEl’s shares in the market, the Prime Minister had last month conducted a meeting on the matter and offered share buy back, special dividend or stake sale to other state-owned entities, as options.
Apparently the third option of allowing other cash-rich entities to buy the BHEl stake was accepted by the Heavy Industry Ministry, sources added. The Government has kept a target of Rs 40,000 crore as the disinvestment target for the current fiscal, out of which it has managed to achieve around 50 per cent of it owing to CIl coming out with an interim dividend of Rs 16,500 crore and ONGC and OIl buying Government’s 10 per cent stake in IOC for Rs 5,000 crore. With divestment of other PSUs like RINl, EIl and HAl also lined up for February, the Government is hoping to achieve this target before March 31.
al>SheteX9pOm hat the banned plant is estimated to manufacture around 70-75% of its active pharmaceutical ingredient requirements. Company had reported Rs 788.85 crore overseas sales during the July- September quarter in the current financial year. Of the total overseas sales, company reported US quarterly sales of $ 125 million which now analysts expect would be impacted.
The USFDA ban would dent the company’s financial performance in the coming quarters but it had an immediate impact on Ranbaxy’s share on the Indian stock exchanges. On BSE, Ranbaxy’s stock price crashed by 19.54 per cent while on NSE, the share price plummeted by 18.94 per cent as investors and institutions resorted to heavy selling. Daiichi Sankyo’s stock listed on Japanese stock market Nikkei also tumbled 5.8 per cent to near its three month low.