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Read more about Budget 2018: FinMin could raise disinvestment target to Rs 1 trn on Business Standard. Upcoming budget 2018-19 to be presented by FM Arun Jaitley, sees an increase in allocation across schemes and public expenditure. Know highlights on Budget 2018 India.

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budget 2018 finmin could raise budget 2018 finmin

Budget 2018: FinMin could raise

Budget 2018: FinMin could raise

disinvestment target to Rs 1 trn

disinvestment target to Rs 1 trn

Likelihood of outstripping 2017-18 budgeted estimate of Rs 725 bn seen as key driver; Air

India sale to be marquee disinvestment action

Budget 2018

Buoyed by the success of this year’s disinvestment programme, the Finance Ministry could set an even

higher target of Rs 900 billion-1 trillion (Rs 90,000-1,00,000 crore) for 2018-19. This will encompass the sale

of Air India, a number of other privatization initiatives, mergers, initial public offerings, the centre’s two

exchange-traded funds, buybacks and offers-for-sale, and even monetization of land assets.

The budgeted estimate for 2017-18 is Rs 725 billion (Rs 72,500 crore), the highest ever for a year so far.

With the acquisition of Hindustan Petroleum by ONGC expected to be completed soon, that target will be

easily outstripped. As of January 22, divestment proceeds stood at Rs 555 billion (Rs 55,500 crore). ONGC’s

acquisition of HPCL’s 51 per cent stake is valued at Rs 369 billion (Rs 36,900 crore). That would take

divestment proceeds to Rs 925 billion (Rs 92,500 crore) for 2017-18.

The upcoming 2018-19 budget, to be presented by Finance Minister Arun Jaitley, while not expected to be

outright populist, will still contain sops and see an increase in allocation across schemes and public

expenditure. He will require resources, and disinvestment is expected to be a major one.

While Air India will be the marquee sale, expected to be completed by October 2018, the centre may sell

Pawan Hans as well, among other loss-making PSUs, Business Standard has learnt. The department of

investment and public asset management (DIPAM) has already created a pipeline for potential stake sale

through various methods.

state owned construction company nbcc ltd which

State-owned construction company NBCC Ltd, which has already bought Hindustan Steelworks Construction

Ltd this year, may buy other smaller construction and engineering PSUs, sources said. The candidates are

Hindustan Prefab, Engineering Projects India Ltd, NPCC Ltd, and HSCC Ltd.

The centre launched its second PSU ETF, the Bharat 22 ETF in November and garneted Rs 145 billion (Rs

14,500 crore). An official said that there is still a massive interest amongst investors, and a second tranche is

certain to be launched early next fiscal. There could be further tranches of its first PSU ETF as well.

The pipeline includes a number of pending IPOs as well. The names include defence companies like

Hindustan Aeronautics Ltd, Garden Reach Shipbuilders, Bharat Dynamics and Mazagaon Dockyards, railway

companies like Ircon, RITES, IRCTC and IRFC, and three general insurance companies. While a few of these

could happen before March 31, most are slated for next year.

Preparations are being carried out for a number of OFSs as well. The plans are for a 10 per cent stake in

NHPC, Power Finance Corporation and SAIL, 15 per cent in NLC, five per cent in Rural Electrification

Corporation and three per cent in Indian Oil. Buybacks by PSUs are expected to continue next year as well.