InvestorQ : Where does the government stand on the divestment front for this financial year?
Debbie Mascarenhas made post

Where does the government stand on the divestment front for this financial year?

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Arti Chavan answered.
4 weeks ago
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Let us look at this in two parts; prior to budget announcement and post the budget announcement. According to reports, the government has so far garnered Rs.19,500 crore from the divestment of PSEs and PSU buybacks in the fiscal year 2020-21 so far. This is far below the overall annual divestment target of Rs.210,000 crore for the full fiscal year.

Originally, the LIC IPO was included in the divestment target of 2020-21. Now, even if you remove the LIC IPO, which could not materialize this fiscal, the government would still find itself having achieved only 20% of the residual divestment target. With just 2 months to go, it is very unlikely that any major divestments can be managed this year.

Four CPSEs including HAL, Bharat Dynamics, IRCTC and SAIL managed to raise close to Rs.13,000 crore through OFS route in this fiscal year. The government also raised Rs.2,800 crore from buyback of shares by four PSU companies this fiscal including the likes of NMDC. However, that is well short of the Rs.110,000 non-LIC divestment target.

The latest Union Budget has pegged the LIC IPO, BPCL divestment, CONCOR divestment and even the Shipping Corporation to move to fiscal year 2021-22. So further collections do not look very likely and may at beast end the current year either around the Rs.25,000 crore or perhaps slightly higher.

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