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1. DISINVESTMENTS
A PRIMER
Presentation to Sr.PCS Officers
U.P Academy of Administration &
Management
Prithvi Haldea
PRIME Database
21 July 2010

2. Definition of Disinvestment
• Investment refers to the conversion of money or
cash into securities.
• In reverse, disinvestment involves the conversion
of securities into cash.
• It is also referred to as ‘divestment’ or
‘divestiture.’
• In most contexts, disinvestment typically refers to
sale by the government, partly or fully, of a
government-owned enterprise.

3. Disinvestment v/s Privatisation
• These are often used interchangeably. There is,
however, a vital difference between the two.
• Disinvestment may or may not result in
Privatisation.
• When the government retains 26% shares, it
would have disinvested, but would not have
‘privatised’, because with 26%, it can still stall all
special resolutions for which three-fourths majority
is required.

4. PSUs-The Background
• In 1947, when India became independent, there
were various socio-economic problems which
needed to be dealt with in a planned and
systematic manner.
• India was primarily an agrarian economy with a
weak industrial base, low level of savings,
inadequate investments and lack of infrastructure
facilities.
• There existed considerable inequalities in income
and levels of employment, glaring regional
imbalances in economic development and lack of
trained manpower.

5. • As such, the State’s intervention in all the sectors
of the economy was desirable and inevitable since
private sector neither had the resources,
managerial and scientific skill, nor the will to
undertake the risks associated with large, long-
gestation investments.
• It became a pragmatic compulsion to use the
public sector as an instrument for self-reliant
economic growth.
• A large number of enterprises were also created
out of "sick units" taken over from the private
sector, inter alia, to protect the interests of the
workers.

6. Disinvestment Policy-
Background
• The new economic policy initiated in July 1991
clearly indicated that PSUs had shown a very
negative rate of return on capital employed.
• Inefficient PSUs had become and were continuing
to be a drag on the government’s resources
turning to be more of liabilities to the government
than being assets.
• Hence, the need for the government to get rid of
these units and to concentrate on core activities
was identified.

7. • The government also took a view that it should
move out of non-core businesses, especially the
ones where the private sector had now entered in
a significant way.
• Finally, disinvestment was also seen by the
government to raise funds for meeting
general/specific needs.

8. Benefits of Disinvestment
For the Government
• Raising valuable resources for the government
which could be used to bridge the fiscal deficit and
also for various developmental projects.
• The government can focus more on core activities
such as infrastructure, defense, education,
healthcare, and law and order.
For the PSUs
• Greater autonomy leading to higher efficiencies
For the Markets and Economy
• Brings greater efficiencies for the economy and
markets as a whole

9. For the Taxpayers
• Letting go of these assets is best in the long term
interest of the tax payers
• Unlocking of shareholder (in this case the citizens
of India) value
For the Employees
• Greater opportunities and avenues for career
growth
• Monetary gains through ESOPs and preferential
issue of shares
• Pay rises, as has been seen in past divestments

10. Different Approaches to
Disinvestments
Complete Privatisation
• Complete privatisation is when 100% control of a
company is passed on to a buyer.
• Most recently, this was done in 2003-04 (eg.18
hotel properties of ITDC and 3 hotel properties of
HCI). Such sales have invited a lot of criticism as
these are marred with allegations of favouritism.

11. Majority Disinvestment
• Government retains a minority stake in the
company
• Historically, majority disinvestments have been
typically made to strategic partners.
• These partners could be other CPSEs themselves
(BRPL to IOC, MRL to IOC, KRL to BPCL).
• These can also be private entities (Modern Foods
to Hindustan Lever, BALCO to Sterlite, CMC to TCS
etc.). Such sales have also invited a lot of criticism
for the same reason as that for Privatisation.

12. Minority Disinvestment
• The government retains a majority stake in the
company.
• Examples of minority sales via auctioning to
institutions go back into the early 90s (Andrew
Yule & Co., CMC etc.)
• The present government’s policy is that all
disinvestments would only be minority
disinvestments via Public Offers.
• Several minority sales done via Public Offers
(Power Grid, REC, NTPC, NHPC etc.)

13. Types of CPSE Disinvestments
1. Strategic Sale to Private Entity
Transactions involving sale of shares held by the
government in CPSEs, including subsidiaries of
CPSEs, along with transfer of management control,
to a strategic private partner identified through a
process of competitive bidding and subsequent sales
to the partner through call/put options

14. 2. Public Offer Transactions
Involving sale of shares held by the government in
CPSEs through a Public Offer

15. 3. CPSE to CPSE Sale
Transactions involving sale of shares held by the
Government in one CPSE to another CPSE

16. 4. Auction to Financial Investors
Transactions involving sale of shares held by the
government in CPSEs through an auction to defined
financial investors/investor groups like public sector
financial institutions

17. 5. Auction to Private Entities
Transactions involving sale of shares held by the
Government in CPSEs through an auction to private
entities

18. 6. Sale To Employees
Transactions involving sale of shares held by the
government to employees of the respective CPSEs

19. Disinvestments-
A Historical Perspective
1991-92 to 2000-01
• The change process in India began in the year
1991-92, with 31 selected PSUs disinvested for
Rs.3,038 crore.
• However, against an aggregate target of Rs 54,300
crore to be raised from PSU disinvestment from
1991-92 to 2000-01, the Government managed to
raise just Rs 20,079 crore in a 10-year period.

20. The reasons for such low proceeds from
disinvestment against the target were:
- Unfavorable market conditions
- Offers were not attractive for private sector
investors
- Lot of opposition on the valuation process
- No clear-cut policy on disinvestment
- Strong opposition from employee and trade unions
- Lack of transparency in the process
- Lack of political will

21. 2001-02 to 2003-04
• This was the period when maximum number of
disinvestments took place.
• These took the shape of either strategic sales
(involving transfer of control and management to a
private entity) or a public offer, with the
government still retaining control of the
management.

22. An amount of Rs. 5,921 crore was realized through
strategic sale. Some of the companies which
witnessed a strategic sale included:
• Bharat Aluminium Co.Ltd.
• CMC Ltd.
• Hindustan Zinc Ltd.
• Hotel Corp. of India Ltd.
• HTL Ltd.
• IBP Co.Ltd.
• India Tourism Development Corp.Ltd.
• Indian Petrochemicals Corp.Ltd.
• Marti Suzuki India Ltd.
• Modern Food Industries (India) Ltd.

23. • In addition, public offers led to divestment
proceeds of Rs. 15,128 crore.
• The total disinvestments proceeds in this 3-year
period were Rs. 21,163 crore.

24. 2004-05 to 2008-09
• The issue of PSU disinvestment remained a
contentious one through this period, courtesy the
Left. As a result, the disinvestment agenda
stagnated.
• In this 5 year period, total receipts from
disinvestments were only Rs. 8,516 crore and all
through public offers.

25. 2009-10 onwards till date
• A stable (minus Left) government has led to a
renewed thrust on disinvestments.
• The President of India’s address on 4th June 2009
stated: “Our people have every right to own part
of the shares of public sector companies while the
government retains majority shareholding and
control. My government will develop a roadmap for
listing and people-ownership of public sector
undertakings while ensuring that government
equity does not fall below 51%.”

26. • The subsequent Union Budgets have also taken
disinvestment on the agenda of the government.
• The government has also announced its intentions
of raising the minimum public shareholding in
listed companies to 25%. This, besides bringing
more quality paper in the market, shall also lead to
huge disinvestment. At current prices, this could
mean Rs. 1,20,000 crore.

27. • The government has started the process by selling
minority stakes in listed and unlisted (profit-
making) PSUs through public offers.
• There has also been 1 CPSE to CPSE sale.
• Till date (in just one and a quarter year),
Rs. 24,615 crore has already been raised through
disinvestments.

28. Total Disinvestments Proceeds till date
Period No.Yrs. Amount (Rs.crore)
1991-92 to 2000-01 10 20079
2001-02 to 2003-04 3 21163
2004-05 to 2008-09 5 8516
2009-10 to present 1.25 24615
Total 19.25 74374

29. Summary of CPSE
Disinvestments
YEAR STRATEGIC
SALE TO
PRIVATE
ENTITY
PUBLIC OFFER
(EXCLUDING
FRESH CAPITAL
RAISING)
CPSE TO
CPSE
SALE
AUCTION
TO
FINANCIAL
INVESTORS
AUCTION
TO
PRIVATE
ENTITY
SALE TO
EMPLOYEES
TOTAL
1991-92 3038 3038
1992-93 1913 1913
1993-94 0
1994-95 4843 4843
1995-96 168 168
1996-97 380 380
1997-98 910 910
1998-99 784 4183 405 5371
1999-00 105 1020 459 1585
2000-01 554 1317 1871
2001-02 2089 1154 25 3268
2002-03 2336 12 2348
2003-04 342 15128 77 15547
2004-05 2700 65 2765
2005-06 1568 2 1570
2006-07 0
2007-08 1814 2367 4181
2008-09 0
2009-10 21306 2247 23553
2010-11 1063 1063
TOTAL 5427 45105 9360 14301 77 104 74374

30. Annual CPSE Disinvestment
Target vs. Achievement
YEAR TARGET
(Rs. crore)
ACHIEVED
(Rs. crore)
ACHIEVEMENT
(%)
1991-92 2500 3038 122
1992-93 2500 1913 77
1993-94 3500 0 0
1994-95 4000 4843 121
1995-96 7000 168 2
1996-97 5000 380 8
1997-98 4800 910 19
1998-99 5000 5371 107
1999-00 10000 1585 16
2000-01 10000 1871 19
2001-02 12000 3268 27
2002-03 12000 2348 20
2003-04 14500 15547 107
2004-05 4000 2765 69
2005-06 0 1570 N.A.
2006-07 0 0 N.A.
2007-08 0 4181 N.A.
2008-09 0 0 N.A.
2009-10 25000 23553 94
2010-11 40000 1063 3

31. Disinvestments-
The Road Ahead
• Given the current political and social compulsions,
complete privatisation or majority sale have been
discarded.
• Offloading a part of the government’s equity by
way of a minority stake sale is the only workable
option.
• Offloading minority stakes to private players would
not make sense as valuations will be poor (since
the government shall still retain control)

32. Hence, best route is minority stake sale via a
Public Offer which has several benefits.

33. For the Government
• Benefit of capital appreciation, courtesy market
valuation of the enterprise
For the PSU
• Listing leads to better and timely disclosures,
bringing in greater transparency and
professionalism
• Greater efficiency by way of being accountable to
outside shareholders and media/analysts

34. • Listing provides an easier opportunity to raise
capital from the market to fund new
projects/undertake expansions/diversifications and
for acquisitions.
• Listing raises a company's public profile with
customers, suppliers, financial institutions and the
media. A listed company is typically covered in
analyst reports and may also be included in one or
more of indices of the stock exchanges.
• Wide investor base also helps prevent market
manipulations.

35. For the Markets and Economy
• PSU IPOs present the best opportunity of widening
the retail investor base. (In UK, the shareholding
population increased from 4% to 25%.)
For the Employees
• Though there could be opposition from employees
of some PSUs, this can be countered and also
turned into a favourable situation by offering
ESOPs/preferential issue of shares to them. This
would provide tangible monetary benefits to them,
and also make them an interested party in better
performance of their companies.

36. CPSE Public Offerings
• First disinvestment by way of public offer took
place in 1995-96. Since then, Rs. 45,105 crore has
been raised through PSU disinvestments from the
capital market.

37. Did you know?
• PSUs constitute 31% of the total market
capitalisation of companies listed at BSE
• The PSU with the highest market capitalisation is
ONGC at Rs. 2,82,417 crore (as on 30 June 2010)
• VSNL was the first PSU to be divested by way of a
Public Offer in 1999-00
• ONGC Public Offer (FPO) in 2004 was the largest
ever by a PSU, raising Rs. 10,542 crore

38. • NHPC Public Offer in 2009-10 has been the
largest PSU IPO raising Rs. 6,039 crore
• Power Finance Corp.’s IPO in 2006-07 was the
largest oversubscribed IPO, oversubscribed by
76.76 times
• Power Trading Corp.’s IPO in 2003-04 received
the best-ever response from retail, with the retail
portion getting oversubscribed by over 40 times

39. • The maximum amount raised by PSUs from the
capital market in any year was Rs. 31,082 crore in
2009-10. The maximum amount raised through
disinvestments from capital market in any year
was Rs. 21,306 crore also in 2009-10
• The maximum number of applications received in
an IPO/FPO since 2003-04 was in NTPC (14.40
lakhs) followed by NHPC (13.14 lakhs)

40. SLPE Disinvestments
• There has been only one SLPE disinvestment
through public offers.

41. Disinvestments by SLPEs
SNO. COMPANY
(NAME AS AT THE TIME OF DISINVESTMENT)
DATE/
MONTH-YEAR
% STAKE
DISINVESTED
AMOUNT
REALISED
(Rs. crore)
1 GUJARAT MINERAL DEVELOPMENT CORP.LTD. (IPO) 14/10/1997 26 107
107

42. Fresh Capital Raising by CPSEs
• In addition to disinvestments, CPSEs have also
been raising fresh capital-either on a standalone
basis or in conjunction with the disinvestment
offer.
• Rs. 37,505 crore of fresh capital has been raised
by various PSUs till date.

43. Year-wise Amounts raised in
PSU Public Offers
YEAR DIVESTMENT
(Rs.crore)
FRESH
CAPITAL
(Rs.crore)
ISSUE
AMOUNT
(Rs.crore)
1990-1991 107 107
1991-1992 7 7
1992-1993 325 325
1993-1994 695 695
1994-1995 710 710
1995-1996 187 2031 2219
1996-1997 1752 1752
1997-1998 107 482 570
1998-1999 142 142
1999-2000 75 400 475
2000-2001 361 361
2001-2002 164 164
2002-2003 773 773
2003-2004 15128 1435 16563
2004-2005 2684 6020 8704
2005-2006 301 6394 7358
2006-2007 1779 1779
2007-2008 1814 4152 5966
2008-2009
2009-2010 21306 9776 31082
2010-2011 1063 1063
GRAND TOTAL 42667 37505 80815

44. Fresh Capital Raising by SLPEs
• SLPEs have also been raising fresh capital through
public offers.

45. Public Offers by SLPEs
SNO. COMPANY
(NAME AS AT THE TIME OF ISSUE)
OPENING
DATE
ISSUE
AMOUNT
(Rs.crore)
1 GUJARAT INDUSTRIES POWER CO.LTD. 13/10/2005 200
2 GUJARAT MINERAL DEVELOPMENT CORP.LTD. 14/10/1997 88
3 GUJARAT STATE FINANCIAL CORP.LTD. 11/02/1997 47
4 GUJARAT STATE PETRONET LTD. 24/01/2006 373
5 HARYANA FINANCIAL CORP.LTD. 18/05/1995 20
6 OPTEL TELECOMMUNICATIONS LTD. 30/06/1995 44
7 PUNJAB COMMUNICATIONS LTD. 24/10/1994 105
8 PUNJAB WIRELESS SYSTEMS LTD. 27/10/1993 15
9 TAMIL NADU NEWSPRINT & PAPERS LTD. 27/11/1995 220
SUB TOTAL 1112
SLPEs at the time of Issue (SLPEs defined as companies where the
direct holding of the

46. Some Arguments against
Disinvestment
The Government will forego dividends on the equity
holdings by selling off its stakes. (CPSEs contributed
Rs. 19,423 crore to the Central exchequer in 2007-
08 as dividends).
Apart from generating a one-time sale amount,
a lot of these part stake sales have also
resulted in huge capital gains.

47. Only 0.5% of Indian households invest in equities.
Thus, in case the public offer route is followed, it
would imply transferring the common ownership of
the PSUs by all Indians into the private ownership of
0.5% of Indians.
While the current equity penetration remains
low, it is precisely these PSU IPOs that present
the best opportunity of widening the retail
base.

48. Using funds made available from disinvestment to
bridge the fiscal deficit is an unhealthy and a short
term practice (selling ‘family silver’ to meet short
term monetary requirements).
Letting go of these assets is best in the long
term interest of the tax payers as the current
yield on these investments in abysmally low.

49. Profit making PSUs should not be disinvested as they
are performing well in any which way.
A good example against this criticism is BALCO
which was a profit making company that
earned the government an average dividend
(over 8 years) of Rs. 5.69 crore every year on
the equity sold. The government post-
disinvestment, however, started getting
Rs.82.65 crore every year. Similarly, Maruti
gave average returns to the tune of Rs. 13 crore
annually to the government and IPCL gave
Rs. 16.24 crore on equity sold against Rs.242
crore and 149 crore respectively post-
disinvestment.

50. Employees of PSUs would lose jobs
These fears have been found to be imaginary.

51. Public Offer being the chosen approach for
Disinvestments does not yield the best realisation
and is a far too time consuming process. Auctioning
to financial institutions (QIBs) should be the
preferred modus operandi.
The government should look at the greater
good and sell these stakes by public offers to
increase retail participation in the capital
markets as well as to increase the depth and
width of the capital markets. In any case, the
loss is minimal as very small stakes are being
sold.

52. The real gains for the government lie in the
appreciation post-listing. Let us look at the PSU
IPOs since 2004. The value of the government
holding, courtesy the market, has gone up
nearly 3 times from Rs. 80791 crore on the
issue date to Rs.2,37,366 crore.

53. International Models of
Disinvestment
UK
• The Margaret Thatcher government, spread over
11 years, went on an aggressive disinvestment
spree in the 1980s in the UK, borne out of the
conviction that the government had no business to
be in business.
• It let loose most of its stake at one go. British
Telecom, British Airways, British Power, British
Petroleum, British Gas, British Rail and Regional
Water Boards are just a few examples.

54. • During its first wave of large-scale privatisation,
UK witnessed about 670 PSUs worth US$ 5.3
billion being privatised with the water companies
fetching over US$10 billion, British Gas about
US$13 billion, and British Petroleum over US$12
billion.
• Public offers were one of the frequently used
techniques in the UK to transfer state assets and
businesses to private ownership.
• The method was fairly successful, having increased
the shareholding population from 4% to 25%. For
example, British Telecom alone created 2.1 million
shareholders in the UK, when privatised.

55. Eastern Europe
• With the UK having taken the lead, the former
citadels of Socialism soon embraced the new
mantra, breaking up state monopolies and selling
them to private parties choosing to let market
forces determine their future course.

56. Other Countries
• Germany privatised 13,500 companies by selling
off its stake in a span of two years.
• Other countries like Taiwan, Hungary, Thailand,
Philippines, Korea, Turkey, Poland, West Asia.
Zambia, Vietnam and even China similarly
marched ahead with the disinvestment program.

57. The future is bright…
• The potential is huge. PSUs are among the largest
and most profitable organisations in India.
• Of the total of 247 CPSEs and their subsidiaries,
only 47 are listed.
• With Public Offers having been defined as the
preferred mode of Disinvestment, a large number
of PSU IPOs/ FPOs can be expected in the future.

58. Imminent PSU IPOs/FPOs
SNO. COMPANY IPO/ FPO ESTIMATED
AMOUNT
(Rs.crore)
1 STEEL AUTHORITY OF INDIA LTD. FPO 4500
2 POWER GRID CORP.OF INDIA LTD. FPO 7500
3 COAL INDIA LTD. IPO 15000
4 PTC INDIA FINANCIAL SERVICES LTD. IPO 400
5 HINDUSTAN COPPER LTD. FPO 9000
6 RASHTRIYA CHEMICALS & FERTILISERS LTD. FPO *
7 NEYVELI LIGNITE CORP.LTD. FPO 2400
8 SHIPPING CORP.OF INDIA LTD.,THE FPO 300
9 MMTC LTD. FPO 500
10 ANDREW YULE & CO.LTD. FPO *
11 BHARAT SANCHAR NIGAM LTD. IPO 20300
12 NATIONAL ALUMINIUM CO.LTD. FPO 3000
13 RITES LTD. IPO 300
14 NATIONAL FERTILISERS LTD. IPO *
15 MANGANESE ORE (INDIA) LTD. IPO 300

59. Other PSU IPOs/FPOs
SNO. COMPANY IPO/ FPO ESTIMATED
AMOUNT
(Rs.crore)
1 AIRPORTS AUTHORITY OF INDIA IPO *
2 ANTRIX CORP.LTD. IPO *
3 BANGALOREMETROPOLITAN TRANSPORT CORP. IPO 750
4 BHARAT ALUMINIUM CO.LTD. IPO 3000
5 BHARAT ELECTRONICS LTD. FPO 1600
6 BHARAT OMAN REFINERIES LTD. IPO 3850
7 BHARAT PETROLEUM CORP.LTD. FPO *
8 BHARAT PETRORESOURCES LTD. IPO *
9 CENTRAL COALFIELDS LTD. IPO *
10 CENTRAL INLAND WATER TRANSPORT CORP.LTD. IPO *
11 CENTRAL WAREHOUSING CORP. IPO *
12 COCHIN INTERNATIONAL AIRPORT LTD. IPO 2500
13 COCHIN SHIPYARDS LTD. IPO *
14 CONTAINER CORP.OF INDIA LTD. FPO 500
15 COTTON CORP.OF INDIA LTD.,THE IPO *
16 DAMODAR VALLEY CORP.LTD. IPO *
17 DPSC LTD. FPO *
18 DREDGING CORP.OF INDIA LTD. FPO *
19 EASTERN INVESTMENTS LTD. IPO *
20 EDCIL (INDIA) LTD. IPO *
21 ELECTRONICS CORP.OF INDIA LTD. IPO *
22 ENNOREPORT LTD. IPO 800
23 EXPORT CREDIT GUARANTEECORP.OF INDIA LTD. IPO *
24 FCI ARAVALI GYPSUM & MINERALS INDIA LTD. IPO *
25 FERTILISERS & CHEMICALS TRAVANCORELTD.,THE FPO *

60. SNO. COMPANY IPO/ FPO ESTIMATED
AMOUNT
(Rs.crore)
26 GAIL (INDIA) LTD. FPO *
27 GARDEN REACH SHIPBUILDERS & ENGINEERS LTD. IPO *
28 GOA SHIPYARD LTD. IPO *
29 GUJARAT ALKALIES & CHEMICALS LTD. FPO *
30 GUJARAT INDUSTRIES POWER CO.LTD. FPO *
31 GUJARAT MINERAL DEVELOPMENT CORP.LTD. FPO *
32 GUJARAT NARMADA VALLEY FERTILIZERS CO.LTD. FPO *
33 GUJARAT STATEENERGY GENERATION LTD. IPO *
34 GURU GOBIND SINGH REFINERIES LTD. IPO *
35 HINDUSTAN AERONAUTICS LTD. IPO *
36 HINDUSTAN NEWSPRINT LTD. IPO *
37 HINDUSTAN PAPER CORP.LTD. IPO *
38 HINDUSTAN PETROLEUM CORP.LTD. FPO 5000
39 HINDUSTAN SHIPYARD LTD. IPO *
40 HINDUSTAN ZINC LTD. FPO *
41 HLL LIFECARELTD. IPO *
42 HMT (INTERNATIONAL) LTD. IPO *
43 HMT LTD. FPO *
44 HOUSING & URBAN DEVELOPMENT CORP.LTD. IPO *
45 INDIA TOURISM DEVELOPMENT CORP.LTD. IPO *
46 INDIA TRADEPROMOTION ORGANISATION IPO *
47 INDIAN RAILWAY CATERING & TOURISM CORP.LTD. IPO *
48 INDIAN RAILWAY FINANCECORP.LTD. IPO *
49 IRCON INTERNATIONAL LTD. FPO 350
50 ITI LTD. FPO *

61. SNO. COMPANY IPO/ FPO ESTIMATED
AMOUNT
(Rs.crore)
51 KUDREMUKH IRON ORECO.LTD. IPO *
52 MAHANADI COALFIELDS LTD. IPO *
53 MAHANAGAR GAS LTD. IPO 150
54 MAHARASHTRA KNOWLEDGECORP.LTD. IPO *
55 MAHARASHTRA STATEELECTRICITY TRANSMISSION CO.LTD. IPO 1500
56 MAHARASHTRA STATEPOWER GENERATION CO.LTD. IPO *
57 MAZAGON DOCK LTD. IPO *
58 NATIONAL AVIATION CO.OF INDIA LTD. IPO 1200
59 NATIONAL BANK FOR AGRICULTURE& RURAL DEVELOPMENT IPO *
60 NATIONAL BUILDINGS CONSTRUCTION CORP.LTD. IPO *
61 NATIONAL HIGHWAYS AUTHORITY OF INDIA IPO *
62 NATIONAL HOUSING BANK IPO *
63 NATIONAL INSURANCECO.LTD.,THE IPO *
64 NATIONAL SEEDS CORP.LTD. IPO *
65 NEELACHAL ISPAT NIGAM LTD. IPO 250
66 NEW INDIA ASSURANCECO.LTD.,THE IPO *
67 NHDC LTD. IPO *
68 NORTH EASTERN DEVELOPMENT FINANCECORP.LTD. IPO *
69 NORTH EASTERN ELECTRIC POWER CORP.LTD.,THE IPO 225
70 NORTHERN COALFIELDS LTD. IPO *
71 NTPC ELECTRIC SUPPLY CO.LTD. IPO *
72 NTPC VIDYUT VYAPAR NIGAM LTD. IPO *
73 NUCLEAR POWER CORP.OF INDIA LTD. IPO *
74 NUMALIGARH REFINERY LTD. IPO 800
75 ONGC PETRO-ADDITIONS LTD. IPO 3500

62. SNO. COMPANY IPO/ FPO ESTIMATED
AMOUNT
(Rs.crore)
76 ONGC VIDESH LTD. IPO *
77 ORIENTAL INSURANCECO.LTD.,THE IPO *
78 PARADIPREFINERY LTD. IPO *
79 PAWAN HANS HELICOPTERS LTD. IPO *
80 PEC LTD. IPO *
81 PETRONET LNG LTD. FPO 490
82 POWER FINANCECORP.LTD. FPO *
83 PRASAR BHARATI IPO *
84 PRIZEPETROLEUM CO.LTD. IPO 150
85 PROSEAL CLOSURES LTD. IPO *
86 RAILTEL CORP.OF INDIA LTD. IPO *
87 RASHTRIYA ISPAT NIGAM LTD. IPO 2850
88 SCOOTERS INDIA LTD. FPO *
89 SETHUSAMUDRAM CORP.LTD. IPO 227
90 SOUTH EASTERN COALFIELDS LTD. IPO *
91 STATETRADING CORP.OF INDIA LTD.,THE FPO *
92 TEHRI HYDRO DEVELOPMENT CORP.LTD. IPO *
93 TELECOMMUNICATIONS CONSULTANTS INDIA LTD. IPO 400
94 UNITED INDIA INSURANCECO.LTD. IPO *
95 URAL INDIA LTD. IPO *
96 URANIUM CORP.OF INDIA LTD. IPO *
97 WAPCOS LTD. IPO *
98 WESTERN COALFIELDS LTD. IPO *

63. However…
We are far removed from the objective:
“Our people have every right to own part of the
shares of public sector companies while the
government retains majority shareholding and
control. My government will develop a roadmap for
listing and people-ownership of public sector
undertakings while ensuring that government
equity does not fall below 51%.”

64. Losses now even on PSUs !
SNO. COMPANY IPO
/
FPO
OPENING
DATE
INVESTOR
CATEGORY
PREMIUM
(Rs.)
OFFER
PRICE
(Rs.)
MARKET
PRICE
(AS ON
20.07.10)
% GAIN
/
LOSS FOR
RETAIL
1 NTPC LTD. IPO 07/10/2004 52.00 62.00 203.10 227.58
2 POWER FINANCE CORP.LTD. IPO 31/01/2007 75.00 85.00 331.90 290.47
3 RURAL ELECTRIFICATION CORP.LTD. IPO 19/02/2008 95.00 105.00 302.00 187.62
4 POWER GRID CORP.OF INDIA LTD. IPO 10/09/2007 42.00 52.00 99.80 91.92
INST. 196.00 206.00
HNI+RETAIL 193.00 203.00
EMP. 183.00 193.00
6 OIL INDIA LTD. IPO 07/09/2009 1040.00 1050.00 1335.60 27.20
INST. 192.00 202.00
HNI+RETAIL 191.00 201.00
EMP. 181.00 191.00
INST. 16.00 26.00
RETAIL 14.70 24.70
9 BHARAT EARTH MOVERS LTD. FPO 27/06/2007 1065.00 1075.00 1021.80 -4.95
INST. 299.00 300.00
RETAIL 284.00 285.00
11 NHPC LTD. IPO 07/08/2009 26.00 36.00 30.10 -16.39
03/02/2010
19/02/2010
10/03/2010
29/04/2010
NTPC LTD.7
RURAL ELECTRIFICATION CORP.LTD.
NMDC LTD.
SJVN LTD.
5
10
8
48.77
203.10 1.04
23.80
SOURCE : PRIME Database
FPO
FPO
IPO
FPO
-3.64
258.30 -9.37
302.00

65. Declining Retail Participation
PSUs-IPOs & FPOs
SNO. COMPANY IPO
/
FPO
OPENING
DATE
ISSUE
AMOUNT
(Rs.crore)
TIMES
SUBSCRIBED
NO.OF
APPLICATIONS
1 NTPC LTD. IPO 07/10/2004 5368 13.14 1440278
2 POWER FINANCE CORP.LTD. IPO 31/01/2007 997 76.76 602883
3 BHARAT EARTH MOVERS LTD. FPO 27/06/2007 527 27.62 105667
4 POWER GRID CORP.OF INDIA LTD. IPO 10/09/2007 2984 64.4 1226614
5 RURAL ELECTRIFICATION CORP.LTD. IPO 19/02/2008 1639 25.75 742192
6 NHPC LTD. IPO 07/08/2009 6039 23.53 1313244
7 OIL INDIA LTD. IPO 07/09/2009 2777 30.64 232754
8 NTPC LTD. FPO 03/02/2010 8480 1.22 100798
9 RURAL ELECTRIFICATION CORP.LTD. FPO 19/02/2010 3530 3.47 57316
10 NMDC LTD. FPO 10/03/2010 9930 1.24 163354
11 SJVN LTD. IPO 29/04/2010 1063 6.24 181372
SOURCE : PRIME Database

66. Need a policy review investors
Policy needs to be reviewed in terms of
• Reservations for retail
• Pricing for retail
• Distribution methods
Coal India can get 1 crore investors

67. Thank you…
prithvi@primedatabase.com