Union Divestment Minister Arun Shourie on Friday said the initial public offering to pare the government's stake in five companies - VSNL, Balco, IPCL, CMC and IBP – would be done within the next six months.

"We will enter into negotiations with strategic partners from the next week and, after discussions, will place our shares in the market within six months," Shourie told reporters after addressing members of Confederation of Indian Industry in Kolkata.

"In the coming few months, the government will place one good scrip after another to raise resources and also to reward Indian investors," Shourie added.

Asked whether the government was going to allow BSNL to raise funds through IPO, Shourie said: "It is for the board of BSNL to decide whether they will go for IPO or not. We are going to transform BSNL and MTNL from ministry-managed companies to board-managed ones."

BSNL chairman Prithipal Singh had said in Kolkata last week that they would adopt IPO route if the government did not reimburse the expenditure for development of telephony in rural areas and also licence and spectrum fee.

The Cabinet Committee on Divestment on Thursday approved the proposal for reducing the balance stake in the Tata-controlled CMC and VSNL, Reliance-controlled IPCL, IOC-controlled IBP and Sterlite-controlled Balco.

The government had reduced its stake in the five erstwhile PSUs during the first round of divestment process.

Shourie said they would take caution against any overcrowding of the market and there would be no 'distress sale' for offloading its 26 per cent equity each in CMC, VSNL and IBP, 33.95 per cent in IPCL and 49 per cent share in Balco.

He said the public sale of equity in these companies would require amendment in shareholders and share purchase agreements with them.

"The IPOs will hit the market one after another," he said.

Without specifying the amount that the government is expected to get from the public offering of its shares in these companies, he said: "It will be substantial."

Shourie, however, refused comment on divestment of Shipping Corporation of India and National Aluminium Company.

"There is nothing to say right now," he said.

Work on to set up data room for HPCL

Shourie said work on setting up a data room for Hindustan Petroleum Corporation Ltd was in full swing.

"Work in on to set up a data room. Due diligence has not yet started," Shourie said.

He, however, did not give any timeframe for the beginning of the due diligence process.

Shourie said the process of divesting the government's 34 per cent stake in India's second largest oil refining and marketing firm had begun in the right earnest, but did not specify any timeframe for privatisation.

Over half a dozen firms including Royal/Dutch Shell, Petronas of Malaysia, Kuwait Petroleum Corporation, Saudi Aramco, Reliance Industries and Essar Oil are in the race for picking up the government stake in HPCL.