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Govt mulls firm to manage state assets

The government said on Thursday it may set up a company to manage government share holdings to take advantage of a rally in their stock prices.

Divestment Minister Arun Shourie told a news conference the asset management company would be staffed by professionals who would actively manage the government's holdings in listed and fully-owned state-run companies.

Since the start of the year, the 34-issue Bombay Stock Exchange public sector undertaking index has surged 80 per cent on the back of a string of successful sales of state-run firms across various sectors.

The government has in recent months sold controlling stakes in giant telecoms firm Videsh Sanchar Nigam, oil marketing company IBP, the country's second largest petrochemical company IPCL and its largest carmaker, Maruti Udyog Limited.

"This will speed up the divestment process. It is to take advantage of the changes that take place in a co-ordinated manner. It will not be a parking lot," Shourie said, but did not give details.

But Shourie did not rule out secondary market operations by the asset management company to benefit from rising stock prices of listed state-run companies.

The asset management company would help the government meet or exceed its privatisation target of raising Rs 120 billion ($2.46 billion) through stake sales in the financial year ending March 2003.

Earlier this week, Shourie said the government hoped to surpass the target as it was mulling steps to cut the time taken to make decisions.

Shourie said a proposal would be submitted to the Cabinet Committee of Divestment by August 15.

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