CCEA cleared stake sales of Coal India,ONGC & NHPC.

After a long hiatus, the government finally seems to be on track to meet its divestment target of over Rs 400 bn for the current fiscal. As per a leading financial daily, the Cabinet Committee on Economic Affairs (CCEA) yesterday, cleared stake sales for Coal India, ONGC and hydropower utility NHPC. At the current stock price levels, disinvestment in these companies is expected to meet the budget target of Rs 434.25 bn. CCEA has cleared a 5% stake sale in ONGC in which the government currently holds 68.94% stake. This is likely to fetch over Rs 190 bn at current price levels. CCEA has cleared a 10% stake sale in Coal India in which the government currently holds 89.65% stake. This could fetch the government close to Rs 240 bn at current prices. The proposed 11.36% stake sale in NHPC is expected to fetch over Rs 30 bn. Given the buoyancy in the markets, achieving the divestment target may not be a big challenge if the government gets the pricing right. The proceeds will be great help in meeting the fiscal deficit target for the fiscal which has been pegged at 4.1% of GDP.