New Delhi: Employees of state-owned firms may have the option of investing as much as they want in follow-on public offers by their companies, while if there should be an occurrence of IPOs the upper roof could go up to Rs 5 lakh once the administration gets the green sign from the Securities and Exchange Board of India (Sebi).
“We have requested the regulator to relax investment ceiling for public sector employees and are hopeful of a favourable response from Sebi,” said an official source.
If markets regulator Sebi agrees to the Finance Ministry’s proposal, there will not be any investment ceiling for employees of the PSUs taking the offer for sale (OFS) route, sources said.
In case of initial public offer (IPO), however, the proposal is to increase the upper limit of investment from the existing Rs 2 lakh to Rs 5 lakh.
The move has been necessitated as employees’ participation has been subdued despite discounts. The best was NTPC’s OFS of 2.06 crore shares in July wherein about 85 per cent of shares reserved for employees were subscribed.
Earlier, the highest ever employee participation was recorded during the offer of Indian Oil Corporation in May when nearly 40 per cent of the employees participated, applying for 53.17 per cent of the 1.2 crore shares on offer.
The favourable response from the regulator will help widen participation of employees and meet divestment target smoothly, sources added.
The government has set a disinvestment focus of Rs 56,500 crore for the current monetary year. Of this, Rs 36,000 crore is to originate from minority stake deal in PSUs and Rs 20,500 crore from key deal. It kick-began the disinvestment program for the current financial year with a 11.36 for each penny stake deal in NHPC. The administration raised Rs 2,700 crore through the procedure.
It has arranged upwards of 15 PSUs, including Coal India, NMDC, MOIL, MMTC, and Bharat Electronics, for stake deal in current financial year.Furthermore, the Cabinet a week ago affirmed a vital deal in misfortune making Bharat Pumps and Compressors Limited. It comes 12 years after a state-run organization – Jessop and Company – was last sold through this course.
Amid 2015-16, the administration figured out how to indent up Rs 25,312 crore through disinvestment, not as much as a large portion of the objective of Rs 69,500 crore.
It had raised around Rs 24,500 crore in 2014-15 by offering stake in broad daylight organizations; about Rs 16,000 crore in 2013-14 and Rs 23,960 crore in 2012-13. It had raised around Rs 14,000 crore in 2011-12 and over Rs 22,100 crore in 2010-11.