Government may defer IPO of seven CPSEs

NEW DELHI: Given the uncertain market conditions, the Union government is likely to delay the Initial Public Offering (IPO) of seven CPSEs slated for listing this fiscal. But it will go ahead with share buybacks, offers for sale and CPSE ETFs as per schedule.

“There is no denying that the stock market sentiment is not at its best. There are some concerns and the government is trying to allay fears. In the given context, it may not be the best of time to go for an IPO as it may not get the response the department has initially estimated. The IPO plan could be slightly delayed,” a senior finance ministry official told TNIE.

The companies lined up for IPO include Telecommunication Consultants (India), RailTel Corporation India, National Seed Corporation India, Tehri Hydro Development Corporation, Water & Power Consultancy Services (India), FCI Aravali Gypsum and Mineral (India), in addition to the listing of IRCTC, IRFC and NEEPCO, which were earlier approved by the Cabinet Committee on Economic Affairs.

However, the official said that so far, there will be no change in the IPO of IRCTC and IRFC, which will go as per schedule by September end.

The government has raised Rs 84,971 crore by the same route in 2018-19 against its stated goal of Rs 80,000 crore. Out of this, it received Rs 1,929 crore via IPO of five firms: MSTC, RITES, IRCON, Garden Reach Shipbuilders and Mishra Dhatu Nigam.

Finance Minister Nirmala Sitharaman had, in her budget speech in July, indicated that the government has set a target of Rs 1,05,000 crore as income from disinvestment in public enterprises for this fiscal.
According to data from the Department of Investment and Public Asset Management, the government has garnered Rs 12,357.49 crore from disinvestment so far this fiscal. This includes IPO of RVNL, a Railways CPSE that fetched Rs 466 crore.

Over the next five years, it aims to raise Rs 3.25 lakh crore through strategic stake sale in PSUs. Meanwhile, the government is upbeat about the ETFs after the recent CPSE ETF clocked highest-ever retail participation and the offer was oversubscribed by five times and DIPAM received subscription amount of more than Rs 40,000 crore as against the base issue size of Rs 8,000 crore.