After opening the day on a positive note, share markets in India have continued the momentum and are trading marginally above the dotted line. Sectoral indices are trading on a positive note with stocks in the oil and gas sectorand stocks in the metals sector leading the gains.
The BSE Sensex is trading up by 86 points (up 0.3%), and the NSE Nifty is trading up by 32 points (up 0.4%). Meanwhile, the BSE Mid Cap index is trading up by 0.8%, while the BSE Small Cap index is trading up by 0.9%. The rupee is trading at 65.44 to the US$.
In news from stocks in the PSU sector. The government is set to meet its divestment target for the first time in many years as it moves closer to its target of Rs 455 billion from its divestment program by the end of this fiscal.
The initial divestment target of Rs 565 billion earmarked in the last years Union Budget, was subsequently revised to Rs 455 billion.
Officials estimate that disinvestment would bring in receipts of at least Rs 440 billion, if not the full targeted amount.
The Centre’s total receipts from disinvestment are also estimated to be at an all-time high this fiscal.
As it stands, the government raised over Rs 393 billion in the current fiscal, through minority share sale by way of offer for sale, share buyback and CPSE ETF so far.
Instead of opting the traditional way of going for pure disinvestment issues such as listing, follow on offers and strategic sales that were expected to improve the functioning of public sector units (PSU), the Centre has relied more heavily on share buybacks and the PSU exchange traded fund.
Big Buybacks of Public Sector Units
Aiding this would be the share buyback announcements by public sector Oil India Ltd and Engineer’s India Ltd that are expected to raise Rs 15.2 billion and Rs 6.6 billion respectively.
Announced as part of the capital restructuring guidelines for state run firms in May 2016, share buybacks by PSUs including Nalco, NMDC and Coal India Ltd have already helped bring in Rs 156 billion.