As ONGC Share Sale Flops, Govt Shuts Selloff Counter

CENTRE 'BUSY' WITH BUDGET, SO NO TIME FOR DIVESTMENT Disinvestment secretary says proceeds from sale satisfactory Bruised by the messy auction of ONGC's shares, the government has put on hold all forms of stake sales for the time being, although officials put up a brave front and said divestment will bounce back with big-ticket deals next fiscal.  The auction of ONGC shares on Thursday nearly collapsed as there were virtually no takers for the offer for a long time and the weak response was magnified by a glitch in the system. But state-owned Life Insurance Corporation (LIC), being run by an acting chairman for over nine months, intervened and bailed out the floundering share auction with wholesale purchases.  The government's stake sale plan, with a target of . 40,000 crore this fiscal, was expected to accelerate after ONGC's auction with more such sales. While the auction was in progress, the Cabinet also allowed cash-rich public sector units to buy back their own shares, giving the government another route to sell equity in companies such as BHEL and Oil India.  But after the setback in ONGC's auction, further sale of equity is under a cloud, at least in the current fiscal. An official in the finance ministry said the government would be preoccupied with budget preparations. "There is hardly any time to embark on share sale through any means, including buyback or selling strategic stake of one company to another," said the official, who did not want to be identified. The government has so far raised about . 14,000 crore from stake sales, including . 1,145 crore from selling shares in Power Finance Corporation. Another . 100-120 crore is expected from the initial public offering of the National Buildings Construction Corporation (NBCC) this month.  • Strapped PSU Banks Stay Away PSU banks shunned the ONGC issue due to a liquidity crunch, reports Arun Kumar Govt, Bankers Trade Charges; Sebi to Probe  The government is pointing fingers at the bankers to the ONGC issue for their inability to bring in top global funds while bankers say the government did not heed their recommendation to price the issue at a discount, reports Our Bureau from Mumbai. Sebi has formed an internal committee to look into the matter. Several Options to Sell PSU Stakes: Khan  The plan to sell ONGC's shares was put off last November, when bankers expected the government to raise . 9,000 crore. While it has mopped up a much higher amount now, the poor response from private institutions is widely seen as a setback.  Disinvestment Secretary Haleem Khan told ET he was satisfied with the auction as it had fetched the government Rs 12,776 crore, and it didn't really matter who participated in the auction.  "For me, it is not important who is bringing (in) money. What is important is at what price money is flowing in. We could not have received this type of money in this type of market through any other process," he said, but refusedto spell out the future course of action in disinvestments. Khan said the government had several options to sell stake — follow-on offer, auction, buyback and selling stake to another state-run firm. "Disinvestment is part of the economic reforms programme. The process to be followed will be chosen depending on market conditions," Khan said. The government received bids for 42.04 crore shares of ONGC at an average price of . 303.67 against the floor price of . 290. Initially, there were bids for 54 crore shares at an average price of . 307.3 but many bids were cancelled, official data showed. Finance Minister Pranab Mukherjee said the government would study the auction process before selling stakes in other companies.