NEW DELHI, February 4: The government has decided to postpone disinvestment of shares of public sector Container Corporation of India (Concor) in the international market through a global depository receipt (GDR) issue till the completion of general elections. The core group of secretaries on disinvestment decided to postpone the Concor GDR issue to a more opportune time after the forthcoming general elections and the formation of the new government, an official spokesman said on Wednesday.The spokesman said the core group, which reviewed the situation, took this decision after considering various options.
Concor was one of the three public sector undertakings which were to tap the GDR market before March 31 as part of government efforts to mop up Rs 7,000 crore by divesting government equity in select PSUs. Originally, the government was to divest ten million secondary shares and issue two million fresh shares in Singapore on Wednesday.
The benchmark domestic price of Concor was Rs 420 and itsinvestment banker, JP Morgan, had reportedly indicated that the deal might have to be priced at a discount to the market price.
``On any valuation criteria, at Rs 420 per share, the issue would have easily sailed through despite the further equity dilution of Rs 84 crore. Even after accounting for balance-sheet expansion (assuming the debt-equity ratio of 1996-97), and practically no growth in PAT (on a compounded basis), at Rs 420, the stock is cheap. The postponement has nothing to do with the company's fundamentals,'' said an analyst.
Perhaps the reason is the present aversion for Asian issues or the fact that, in the event of a stable government being formed, the price obtained could be higher after the elections. The government was keen to continue with the Concor issue as the previous GDR issue -- MTNL -- got good response from the overseas investors. Its plan to launch GDR issues of Indian Oil and other PSUs has not worked out due to various reasons.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
