NEW DELHI (TIP): The government has identified over a dozen blue-chip public sector companies for disinvestment during the current financial year and plans a second exchange-traded fund (ETF) as it tries to scale the stiff target set by finance minister Arun Jaitley.

Sources said the idea of a second ETF was proposed by ratings agencies to the department of economic affairs recently and it is being “considered seriously”, although unlike the first such fund, the new one will be ?energy light’. An ETF is a basket of stocks that is traded on stock exchanges and the first one launched during the last fiscal was seen to have a heavy presence of energy PSUs.

The government hopes to garner Rs 43,325 crore through disinvestment in PSUs, while another Rs 15,000 crore is expected to come from stake sale in Axis Bank, whose shares are held by Specified Undertaking of UTI (SUUTI), the entity that took over the assets and liabilities of the erstwhile UTI. An additional Rs 5,000 crore is budgeted to come from sale of residual shares in Balco and Hindustan Zinc, where the Centre is about to kick off the valuation exercise and hopes to complete the transactions by the end of October.

Apart from SAIL, Coal India and ONGC, there are several mid-rung PSUs, including five from the power sector where the government is eying a possible stake sale. ONGC and Coal India alone are expected to mop up Rs 35,000 crore based on current market price. While National Hydel Power Corporation, Power Finance Corporation and Rural Electrification are comparatively easier ones where the Centre is expected to divest through an auction of shares on the stock exchanges, the government will seek permission from states for joint ventures Tehri Hydro Development Corporation and SJVN, said sources familiar with the development.

In addition, some of the companies where the government holds over 75% stake, will also see a stake dilution to comply with the recent Sebi move that public shareholding in all listed entities should be at least 25%, as against the earlier floor of 10%.

There are 19 such PSUs where the government has to dilute its holdings but is opting to begin with companies where the stake is closer to 80%. As a result, companies such as MOIL and NMDC (where the government holds 80% each) and NBCC and Neyveli Lignite (90% each) are on the radar, although officials said that some of them may be deferred to next year. The government wants to ensure that there is no bunching of share sales so that there is investor appetite and private sector is not starved for funding.

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