Cabinet note surfaces on Oil India, Hind Copper divestment

There has been enough talk about the Budget’s credibility. Instead of rosy numbers, the industry wants numbers that are realistic and achievable. And it seems the government is getting proactive and serious about the numbers it gave out this year. At least the divestment ministry is.

Last year, the ministry’s performance was disastrous. It promised divestment worth Rs 40,000 crore and ended up with only Rs 15,000 crore. Of that almost Rs 12,000 crore came from ONGC selling shares to LIC.

So this year, the ministry does not want to keep things for the end. A CNBC TV18 exclusive story says a CCEA note, that is a cabinet note has been floated for divestment of Oil India, Hindustan Copper and Neyveli Ignite. The timing of the divestment has not been decided yet as inter ministerial consultations are yet to be done.

Neyveli Lignite will have to sort out certain trade union issues for the divestment to happen. While Hindustan Copper had received a nod earlier for fresh issue of shares, a straight divestment requires separate permission as the pricing process could be different.

It is also not sure whether it will be a divestment of 10 percent for each of them or whether will issue new shares as well. It also has to be decided if the divestment will be done through the normal book building process or through an auction like in the case of ONGC. But this much is clear that the auction process used for ONGC will have to be tweaked as the government will not want to end up with same fate.