Divestment plan back on track; govt not planning more ETFs: DIPAM

Mumbai: The government does not plan to come up with more ETFs or even offer for sale for the same stocks as a part of their divestment strategy, Tuhin Kanta Pandey, Secretary of Department of Investment and Public Asset Management (Dipam), said in an interaction with ET NOW on Friday.

Pandey said the strategy is not to do blanket or sweeping transactions.

Pandey further added that the strategic disinvestment was back on track and several initial public offer (IPO) transactions are planned.

“The government is planning to sell 20-25 per cent stake in IRFC through an IPO and 27 per cent stake in RailTel Corporation,” he said.

Earlier this month, state-owned telecom infrastructure provider RailTel filed Draft Red Herring Prospectus (DRHP) with the market regulator Sebi for an IPO of up to 8.66 crore equity shares.

The government has set an ambitious disinvestment target of Rs 2.1 trillion for this fiscal. However, the government is yet to reach even the halfway mark of its FY21 divestment goal. In the current fiscal year, the government has raised Rs 5,695.63 crore through offers for sale in defence equipment makers Hindustan Aeronautics and Bharat Dynamics.

In the beginning of October, the government had raised Rs 444 crore as it sold 15.17 per cent stake in Mazagon Dock Shipbuilders – its first IPO of FY21.

The divestment target for this fiscal includes the mega IPO of Life Insurance Corporation of India (LIC) and a stake sale in IDBI Bank. The government is also considering selling stakes in Air India, Bharat Petroleum Corporation Ltd (BPCL), Container Corporation of India Ltd (Concor) and Shipping Corporation of India Ltd (SCI). However, none of these divestments have been completed so far.

Pandey’s comments come in at a time when the recent stock listings have seen volatile times on bourses, and analysts believe that the euphoria around the primary market may have paused for now.

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