FY2019-20 disinvestment target: DIPAM might end March with only Rs 50,300 cr

New Delhi: With just a week to go for the financial year to end, the government looks set to miss its revised FY2019-20 disinvestment target by around Rs 15,000 crore, a source at DIPAM (Department of Investment and Public Asset Management) told PSU Watch on the condition of anonymity. The money raised via disinvestment including OFS (Offer for Sale), equity traded funds and buybacks stood at Rs 35,537 crore as on March 12.

On Wednesday, the DIPAM finally signed off two deals that were in the pipeline — the sale of government stake in THDC and NEEPCO to NTPC and the sale of Kamarajar Port Ltd. to Chennai Port Trust. "The NTPC-THDC-NEEPCO deal will yield the government Rs 11,500 crore and the Karmajar Port deal will bring in around Rs 2,400 crore. The total by the end of the month will be somewhere around Rs 50,300 crore."

FY2019-20 disinvestment target: Govt puts off OFS

Even as a few share buybacks from public sector undertakings are in the pipeline, the multitude of OFS that the government had initially planned will not be taken up because of the volatile situation in the stock markets owing to the Coronavirus pandemic and the subsequent shutdown and the crash in oil price. The government was relying on a number of minority stake sales to meets its FY2019-20 disinvestment target.

The backdrop

The Centre had revised its FY2019-20 disinvestment target from Rs 1.05 lakh crore to Rs 65,000 crore in February this year, as two major deals were pushed to the next fiscal — Bharat Petroleum Corporation Limited (BPCL) and Air India. For FY2020-21, the government has set a target of Rs 2.1 lakh crore, including Rs 90,000 crore which is expected to come from the sale of Center's stake in banks and financial institutions. The deadlines for Air India have already been postponed and rumour has it that BPCL sale is also set to be delayed in the backdrop of the worldwide Coronavirus outbreak.