In an interview to CNBC-TV18, divestment secretary DK Mittal says NTPC issue is likely in second half of January or early February. He also expects Oil India issue in first half of January. "Oil India issue is likely before NTPC," he adds.
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Pricing, he says, will be based on the market conditions. "It is tough to time issues, valuations will be based on the market conditions. No initial public offerings (IPOs) are expected in FY13," he asserts.
According to Mittal, policy limitations remain a key risk for PSU companies. "We don't want investors looking to make short-term gains. LIC is not a short-term player. It will hold companies for over 10 years," he adds.
Hindustan Zinc (HZL), and BALCO stake sale will be put forward to Cabinet soon. "It is upto mines ministry to take HZL, and BALCO stake sale forward," he elaborates.
Below is the edited transcript of his interview with CNBC-TV18's Udayan Mukherjee and Mitali Mukherjee
Q: National Mineral Development Corporation (NMDC) got very good response from global investors as well but the next big case for you is National Thermal Power Corporation (NTPC). Would you look at pricing as attractive as NMDC even for the NTPC issue in January?
A: No I don't think it is a question of making the price attractive or not. The idea would be at that at that point of time when we decide to disinvest - how is the market condition and what the strategy would be used. It is premature to say anything at this point of time.
Certainly, we would like to have a strategy where the government makes money and the investors make money. It is not that we only want to make money from government of India.
Q: NTPC will hit the market in the first 15 days of January you would say?
A: That would come either in the second half of January or first fortnight of February.
Q: But that is the next one that is coming through or do you have something else lined up in the interim?
A: We also have Oil India that also should be coming out.
Q: So what is the targeted timeline for Oil India?
A: That should be within January first half.
Q: Are you going to complete your calendar of this offer for sales; large companies like Steel Authority of India (SAIL), Bharat Heavy Electricals (BHEL) before you look at any IPO from the governments table?
A: We have a target announced in the Budget before parliament of Rs 30,000 crore. So we have a number of companies, which have been agreed to at different levels and we are going ahead with that plan. Presently Oil India and NTPC are signed and the rest will follow.
Q: Is there any apprehension or resistance to the idea of selling this paper because stocks like NTPC, BHEL, SAIL are trading at multi year lows. Is there any apprehension that you are selling off this paper at very low valuations from a government perspective?
A: When we sit for the pricing, at that time we will look at all the parameters. As all of us know, it has not been possible to time the best price for any issue, for anybody. So it is a question of the intrinsic value of the companies. The long-term investors and the institutional investors know the intrinsic value. That's how we should be working when we decide on the pricing of the issue.
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