They trust Modi: Govt’s divestment plan finds support from buyers

Ambitious disinvestment plan proposed by the Central government evinced good response rom buyers than previous years. The change in the mood is due to improving of political and economic situation under Narendra Modi leadership.Investment bankers feel the market has enough appetite. Also some of the companies are established long ago and known among the domestic and overseas investors. The government plans to raise Rs 80,000 crore by way of disinvestment in the present fiscal.Looking at the way the FIIs are swing into markets clearly shows that the investors are attracted to Indian markets compared to other emerging markets.
“We see an increasing participation from Indian investors especially retail investors and we expect such investors to actively participate in IPO and PSU OFS, especially if there is a retail discount offered,” says a market analyst.According to the reports, the Modi government has raised its 2015 fiscal disinvestment target by 41 per cent to Rs 80,000 crore over last year. It has plans to sell stake in state-owned companies like Coal India (CIL), Hindustan Zinc (HZL), Balco, Steel Authority of India (SAIL), Rural Electrification Corporation (REC), and Power Finance Corporation (PFC) among others.Besides, an additional 34 companies have public shareholding below 25% and may help the Centre raise about Rs 24,000 crore.Hopes of likely turnaround in economic situation improved sentiment in the secondary market. Benchmarking indices turning positive with returns to the tune of 25 per cent since February this year, expecting best performance and trust reposed on Modi’s governance capabilities.Investment bankers said that markets have the potential to receive another $15-20 billion, and about 50 per cent of the total FII flows could flow into equity offerings like IPOs, FPOs, QIPs, and government disinvestment.