Backdoor Disinvestment?

To introduce more transparency and public participation in the stock market, the finance ministry has proposed raising the public shareholding limit for listed companies to at least 25 per cent from the existing 10 per cent.  … Read on

Outwardly it looks like a desperate attempt at Disinvestment of PSU companies, which has totally stopped since the current govt came to power.  Now that the  markets are looking down and revenues of the govt could fall,  will the public really buy into these corporates?  or  even the govt PSUs  that have seen fall of  public interest , especially in Oil Companies, due to the governments record as a promoter being small investor or corporate profit unfriendly and highly unprofessional by making them share the governments cost burdens via regulated markets, subsidy burden sharing and oil bonds. Not only that regulator is still toothless and time and again has been seen as blundering, and bating for big corporates and not only that in the country’s scam history how many promoters of  vanishing and ghost companies have  ever been brought to book let alone punished?

What effects will this  have on the markets if actually implemented in its entirety something that i think is highly unlikely . And will this be accepted by corporates and all powerful business families that would be wary of this kind of legislation and that have massive influence on the decision makers via donations and slush funding.


9 thoughts on “Backdoor Disinvestment?

  1. not in this environment , without offering substantial discounts , without allegations of a scam and likes , plus it is a badly managed company nyways

    mmtc interests me though

  2. hey ankur
    i have doubts if anyone will buy the govt ipos if not offered at a deep discount, they r run as fiefdoms of the upa politicians

    on mmtc it is a super ratna and almost a monopoly and tell me who wants to part with a profitable monopoly

  3. mmtc…
    what is a super ratna? never knew there was an official term like that.

    monopoly is temporary… u and i know that eventually it is going to be over. so like VSNL, its better to sell it when u can still get good valuation.

    BTW the company is at a PE of 802.60 …. u must be crazy if GoI does not want to disinvest it now.

    govt ipos… well traditionally they were always sold at a discount… but let me keep my fingers crossed till i get a final date for the implementation.

  4. basically that is a word coined by me

    i know about vsnl. mmtc i think – does all the trading of metals and minerals including rare ones like bullion and gold for the govt and as such it would retain its status

    as there is nothing to subsidise this can be a safer bet

  5. mmtc has no fundamental strength…..
    i can bet you that if the free float is increased from 0.4% to even 10%, then within 6 months the company’s share price will fall from 25,000 to 2,500/-

    agreed but lets see, we can always buy it for listing gains if the ipo is worth it

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