Government lines up public issues of more PSUs

The government is likely to list four or five more of state-owned companies, which include Satluj Jal Vidyut Nigam Ltd, Manganese Ore India Ltd and Cochin Shipyard, by March next year.

A senior government official said the government plans to dilute up to 10 per cent in these companies.

The Union Cabinet is likely to approve these initial public offer proposals in the coming weeks to enable them to complete the ground work in time for a March issue.

These public issues will be in addition to IPOs by hydro-power producer NHPC, oil retailing firm Oil India Corporation Ltd and the Indian Railways consulting arm RITES that have received government approval and are likely to hit the market this November.

A possible Rs 42,000-crore mega-issue from the country's largest telecom services company Bharat Sanchar Nigam Ltd (BSNL) is also on the cards.

Having parted ways with the Left parties, the United Progressive Alliance government is hoping to accelerate the pace of reforms as it hits the last stretch of its five-year term before Lok Sabha elections early next year.

Disinvestment is a key element of this agenda. Such proceeds cannot be used to meet the government's general expenditure. The UPA government has created a separate account -- the National Investment Fund -- to park disinvestment earnings.

IPOs from government companies are also expected to help the lacklustre market sentiment improve. The Bombay Stock Exchange's benchmark Sensex has fallen 5,369.41 points (25.7 per cent) since its January 8 high of 20,873.33.

As a precursor to the IPO, the companies must reconstitute their boards and appoint independent directors. Listing rules specify that 50 per cent of the board has to comprise independent directors. Cochin Shipyard has already done so, indicating its readiness to go public.

Satluj Jal Vidyut posted a net profit of nearly Rs 716 crore and  Manganese Ore India Ltd's net profit stood at Rs 480 crore in 2007-08. Cochin Shipyard had a net profit of Rs 58 crore in 2006-07.  The relevant numbers for 2007-08 and after are not available on the company Web site.