1. You Are At:
  2. English News
  3. Business News
  4. Govt set to hit divestment goal first time post ONGC-HPCL Rs 36,915 cr deal

Govt set to hit divestment goal first time post ONGC-HPCL Rs 36,915 cr deal

ONGC will pay Rs 473.97 per share for 77.8 crore shares of the government in Hindustan Petroleum Corp Ltd (HPCL), the company said in a stock exchange filing.

New Delhi Updated on: January 20, 2018 23:56 IST
Representational pic - Govt on track to meet disinvestment
Representational pic - Govt on track to meet disinvestment target first time after ONGC-HPCL Rs 36,915 cr deal

The government is all set to cross annual disinvestment target this fiscal for the first with ONGC buying the Centre's entire 51 per cent stake in HPCL for Rs 36,915 crore. 

Total disinvestment proceeds during the current financial year 2017-18 stood at Rs 54,337.60 crore (as on January 11, 2018). With its stake sale in HPCL, the government's disinvestment receipt will work out to be Rs 91,252.6 crore. 

The higher receipt from disinvestment will help the government in sticking to its fiscal deficit target of 3.2 per cent of the GDP this financial year, which may see lower collections from the newly introduced Goods and Services Tax. 

In the Union Budget presented on February 1 last year, Finance Minister Arun Jaitley had set the target of disinvestment in public sector units at Rs 72,500 crore. This include Rs 46,500 crore as disinvestment of CPSEs, Rs 15,000 crore from strategic disinvestment and Rs 11,000 crore from listing of insurance companies. 

The government reduced its stake in several PSUs this year, including HUDCO, EIL, NTPC, NALCO and OIL. Two state-owned insurance companies, GIC and New India Assurance were listed on stock exchanges this fiscal. 

In the last fiscal, the government had raised a record Rs 46,247 crore. In the Budget for 2016-17, it had set a target of Rs 56,500 crore from disinvestment. Later in the Revised Estimates, the target was scaled down to Rs 45,000 crore. 

State-owned Oil and Natural Gas Corp (ONGC) today announced acquisition of the government's entire 51.11 per cent stake in oil refiner HPCL for Rs 36,915 crore, paying a premium of over 10 per cent. 

Earlier in the month, the government had announced to curtail its additional market borrowing programme by 60 per cent to Rs 20,000 crore. The decision to lower additional borrowing, which was taken after a review of revenue receipts and expenditure, will help contain fiscal deficit that has come under stress on account of lower GST mop up. 

In the Budget, the government had announced the fiscal deficit target for fiscal ending March 2018 at 3.2 per cent of the GDP. 

Write a comment