The government has decided to sell 10 per cent equity in Bharat Heavy Electricals Ltd and 7.5 per cent shares in Maruti Udyog Ltd next fiscal to raise close to Rs 2,500 crore (Rs 25 billion).
"We agreed today (Tuesday) that there will be divestment of 10 per cent shares in BHEL and 7.5 per cent stake in Maruti," Heavy Industries Minister Santosh Mohan Dev told newspersons after a meeting with Finance Minister P Chidambaram.
"The shares in BHEL and Maruti will be sold in the next fiscal as we expect better value with BHEL likely to post good results this fiscal. Maruti's performance has been good," he said.
Based on the current prices, sale of 10 per cent stake in BHEL is expected to yield around Rs 1,600 crore (Rs 16 billion), while the sale of Maruti's shares will fetch between Rs 800-900 crore (Rs 8-9 billion).
Dev said the finance minister has also agreed to his suggestion that employees of BHEL be offered as many shares of the company that they can buy.
He said the money raised from sale of equity in Maruti and BHEL would be utilised for social sector schemes and even recapitalisation of the existing public sector units.
Indian public and mutual funds would be given preference during the sale of shares of both the companies, he said.
The Union Cabinet and the Cabinet Committee on Economic Affairs will meet on Thursday to further discuss the issue of divestment.
"We broadly agreed on the views to be presented to the Cabinet and CCEA (on the issue of divestment)," Chidambaram said.
He said no specific cases were coming up before the CCEA and Cabinet.
After sale of 10 per cent shares in BHEL, government's equity in the company would come down to 57 per cent.
In Maruti, the government currently holds 18.24 per cent and after the sale of 7.5 per cent of the equity, its share in the company will come down to 10.74 per cent.