The Centre on Wednesday met its divestment target for the fiscal year with Punjab National Bank returning Rs 1,153 crore (Rs 11.53 billion) capital to the government.
It was for the first time that a nationalised bank returned capital to the government at a premium. PNB paid the amount after deducting Rs 17 crore (Rs 170 million) as the government's proportionate share in the expenses for the public offer of 80 million shares earlier this month. Of the entire offer, 30 million equity shares were the Centre's shares.
The Divestment Development: Complete Coverage
The amount represented the proceeds from subscriptions to 30 million equity shares, with a face value of Rs 10 each and a premium of Rs 380 a share.
The bank's chairman and managing idrector SS Kohli presented two cheques to Finance Minister P Chidambaram on Wednesday.
While the Centre received Rs 1,004 crore (RS 10.04 billion) as capital and share premium, another Rs 148.98 crore (Rs 1.49 billion) have been paid as contingent provision for dividend distribution tax. The PNB also paid Rs 63 crore (Rs 630 million) as interim dividend.
The government had earlier received around Rs 2,600 crore (RS 26 billion) after selling its 5.2 per cent stake in National Thermal Power Corporation.
The government had off-loaded a part of its stake in NTPC along with a fresh issue of shares by the PSU. The remaining Rs 300-odd crore (Rs 3 billion) were contributed by the unrealised proceeds from divestment during 2003-04, finance ministry officials said.
The Centre had set a target of Rs 4,000 crore (Rs 40 billion) as disinestment receipts in the Budget estimates for 2005-06, which was increased to Rs 4,091 crore (Rs 40.91 billion) in the revised estimates.
This year's realisation from divestment is the third highest since 1995-96. In 2003-04, the government had realised Rs 16,953 crore (Rs 169.53 billion) from the sale of its stake in companies like Oil and Natural Gas Corporation and Maruti Udyog Ltd. During 1998-99, it generated Rs 5,874 crore (Rs 58.74 billion), the second highest mop-up in the past decade.
The Centre has not fixed any official sell-off for 2005-06, when the proceeds of divestment start flowing into the National Investment Fund instead of the Consolidated Fund of India, as was the case until this year.