Divestment department wants listed PSUs to engage investors on a regular basis
26 October 2015
The Department of Disinvestment (DoD) wants listed PSUs to engage investors on regular basis so as to update them on the company's plans and keep them better informed so as to facilitate share sale on short notice.
The DoD wants the Department of Public Enterprises to encourage listed PSUs to organise conference calls with investors, merchant bankers and analysts after quarterly results, an official said.
Several large private sector companies hold conference call alongside the release of quarterly and annual financial data so as to remain active in the market – a sort of investor outreach that lets investors know what is happening at the company.
The idea is that if you have informed retail investors, you can enter or exit market on short notice.
DoD also offered to facilitate meetings between PSUs and merchant bankers so that company officials can go and meet investors in order to motivate company officials to push stock sales.
The divestment department wants PSU representatives to attend investor conferences organised by merchant bankers so that awareness among retail participants can grow.
DoD is reported to have already taken up the issue of reducing the time period between the announcement of an offer for sale (OFS) and actual sale.
Sebi had, in June allowed companies to disclose OFS plans two banking days prior to the share sale - a move that has led to most PSU share sales taking place on Mondays as the Department of Disinvestment does not want trading days in-between the announcement and stake sale.
The DoD had asked Sebi to reduce the time gap between announcement and actual sale to T-1, which is one trading day before OFS.
But, besides these companies themselves will have to build some safeguards to increase retail awareness.
The government has targeted to raise Rs69,500 crore through disinvestment in current fiscal. So far, it could raise only Rs12,600 crore through stake sale in four PSUs.