Forget general investors, PSUs are finding it hard to convince even their own employees to take part in the disinvestment programme, and none of them was able to sell the entire quota reserved for their workforce in public offers since the last fiscal.
Besides, some PSUs that have remote locations are unable to communicate the public offer message to their employees and face various difficulties like opening demat accounts.
"What we have found in the seven, eight instances is that whatever was reserved for employees has not been fully subscribed. The best subscription we had was of REC, which went up to 75 per cent. And in some companies it has been as low as 20-25 per cent," Disinvestment Secretary Sumit Bose said at a SCOPE seminar on Tuesday.
He further said that in the recent follow-on public offer of Engineers India, only around 60 per cent of the employee quota got subscribed.
The government had raised Rs 25,000 crore (Rs 250 billion) through stake sale in Oil India, NMDC, REC and NTPC during 2009-10, while it aims to raise Rs 40,000 crore (Rs 400 billion) through disinvestment this fiscal.
So far, in the current fiscal, divestment in the Satluj Jal Vidyut Nigam has fetched the exchequer over Rs 1,000 crore (Rs 10 billion) and it managed to mop up around another Rs 1,000 crore (Rs 10 billion) by selling stake in Engineers India.
In all these public issues, the government has reserved certain percentage for its employees.
Bose cited some difficulties that have kept employees from participating in the government's disinvestment programme.
"REC is a very urban type of corporation with limited number of employees. That is its strength and many of them are in headquarters.
On the other hand, let us look at NMDC. Spread all over in some of the remotest corners of the country, much of it is inaccessible (to) lot of grades of employees," he said.
"To carry the message that these are stocks of your company, you can become owner of the company, is that much more challenging as are all other requirements (like) opening demat accounts", Bose added.
On the forthcoming IPO of Coal India, which filed draft prospectus with Securities and Exchange Board of India on Monday, Bose said, "You would have been reading in the paper that CIL which has filed draft prospectus yesterday has been making a lot of efforts to open demat accounts across its 8 subsidiaries. It is a challenging task."
