Govt open to disinvestment in SBI, ONGC: FM Nirmala Sitharaman
“We are working to make sure that… valuations are kept up. “The share prices have gone up and the dividends are much better than earlier,” she said of PSUs.
The government is open to the idea of disinvestment of equity in blue-chip PSUs like the SBI and ONGC, finance minister Nirmala Sitharaman has said.
The minister told Network 18 that the government was not against holding a minority state (less than 50 per cent) in key strategic public sector companies.
Minority stake
This would include the State Bank of India (SBI) and the Oil and Natural Gas Corp (ONGC).
“Absolutely,” Sitharaman said, when asked if she was okay with holding 49 percent or less in PSUs.
Currently, the government holds a controlling 57.49 percent stake in SBI and 58.89 percent stake in ONGC.
Increasing disinvestment
“You will see periodically, DIPAM, the department which takes care of the disinvestment, has slowly released a lot of government's shares into the market so that private ownerships can come in and they can take hold of those shares,” Sitharaman told Network 18.
The government has been on a divestment drive in recent years, selling stake in numerous publicly listed and privately held companies.
However, it sold the controlling stake in only Air India in recent years, which was acquired by Tata Group.
Valuation of PSUs
The minister said the government was for steps that raise the valuation of PSUs.
The government-owned companies have historically traded at discounts to their private peers. However, in the last couple of years, they have closed the gap.
“We are working to make sure that… the valuations are kept up,” she said. “If you look at the public sector listed companies and their valuation in the market today, you see the kind of vibrancy which has been brought into them."
Core sectors
“The share prices have gone up and the dividends are much better than earlier. So, disinvestment is one thing but (we are working on) bringing value to them, and making sure that the market looks at them favourably,” she said.
Sitharaman added that the private sector has been allowed into “core strategic” sectors and that the government wants to have only “minimum presence” in these sectors.