Government Contemplates SBI and ONGC Disinvestment: Finance Minister Sitharaman Signals Openness to Equity Shift in Key PSUs

By vibhuti 3 Min Read

Finance Minister Nirmala Sitharaman hints at a potential disinvestment in major PSUs, including SBI and ONGC. The government considers relinquishing a minority stake, aiming to enhance valuations and market favorability.

New Delhi, February 03, 2024: In a significant development, Finance Minister Nirmala Sitharaman has expressed the government’s openness to the idea of disinvestment in major public sector giants such as the State Bank of India (SBI) and the Oil and Natural Gas Corp (ONGC). In an exclusive interview with Network 18, Sitharaman stated that the government is not averse to holding a minority stake, emphasizing the possibility of maintaining less than 50 percent ownership in key strategic public sector companies.

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When questioned about the specific percentage she would be comfortable with, the Finance Minister affirmed, “Absolutely,” indicating her willingness to consider a 49 percent or lower stake in these PSUs. Currently, the government holds a controlling 57.49 percent stake in SBI and a 58.89 percent stake in ONGC.

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Sitharaman shed light on the government’s ongoing divestment efforts, highlighting the periodic release of government shares into the market by the Department of Investment and Public Asset Management (DIPAM). This strategy aims to facilitate private ownership and increased market participation.

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Addressing concerns about the valuation of public sector companies, Sitharaman emphasized the government’s commitment to steps that enhance their market worth. Traditionally, government-owned firms have traded at discounts compared to their private counterparts. However, Sitharaman noted a positive shift in recent years, with improved share prices and dividends.

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“We are working to make sure that the valuations are kept up,” stated Sitharaman. She emphasized the focus on not only disinvestment but also on adding value to these PSUs to garner favorable attention from the market. Sitharaman acknowledged the entry of the private sector into core strategic sectors and outlined the government’s objective of maintaining a “minimum presence” in these sectors. The move aligns with the broader strategy of fostering a vibrant market environment while ensuring the efficient functioning of crucial sectors in the country.

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