The central government recently announced plans to sell shares of four public sector undertakings as part of its budget target of Rs 30,000 crore.

The PSUs short-listed for share sale include trading company Metals and Minerals Trading Corporation, copper manufacturer Hindustan Copper, oil explorer Oil India and aluminium manufacturer National Aluminium Company.

IndiaSpend's Sourjya Bhowmick looks at the financial details of the PSUs on some important parameters.

Metals and Minerals Trading Corporation

MMTC, established in 1963, is one of the two highest foreign exchange earners for India. It is also the largest international trading company of India and the largest non-oil importer in India. Table 1 shows the balance sheet of MMTC over the last 10 years.

Table 1: MMTC

YearTurnoverNet Profit/LossShare CapitalCapital EmployedManpower

(In No)

201165,929121100NANA
201068,85521650NANA
200936,82114050856188
200826,42320050747195
200723,30212750589200
200616,362108501,073203
200515,12410750783206
20049,0995150804208
20036,2262550511216
20027,2441850750240
20015,3021250825245
20004,6971550774286

(Figures in Rs crore; Source: MMTC Limited )

Hindustan Copper

Hindustan Copper is under the Ministry of Mines, and was started on 9th November, 1967. Its operations cover mining, beneficiation, smelting, refining and casting of refined copper into downstream saleable products. Table 2 shows the balance sheet of HCL over the last 10 years.

Table 2: Hindustan Copper

YearTurnoverNet Profit/LossShare CapitalCapital EmployedManpower (No)
2010-111,2582244636395,100
2009-101,4301554635855,300
2008-091,34910 (-)4635715,440
2007-081,8402464636575,405
2006-071,8003149775055,451
2005-061,0541069492475,583
2004-05559569492355,665
2003-0451956 (-)9092155,995
2002-03506148 (-)7952047,865
2001-02605184 (-)7102499,502

(Figures In Rs crore; source: Hindustan Copper Limited)

As can be observed from the table, there were four years when HCL reported a loss.

OIL India

Oil India became a wholly-owned Government of India enterprise in 1981. It is engaged in the business of exploration, development and production of crude oil and natural gas, transportation of crude oil and production of liquid petroleum gas. Presently, it is one of the top 10 profit-making PSU. Table 3 shows the balance sheet of OIL over the last 10 years.

Table 3: OIL India

YearTurnoverNet Profit/LossShare CapitalCapital Employed
2010-118,3032,88824015,728
2009-107,9052,61024013,019
2008-097,2412,1622148,919
2007-086,0821,7892147,393
2006-075,3891,6402147,141
2005-065,5501,6902145,917
2004-053,8881,0622145,195
2003-043,1459,4972144,573
2002-032,8979,1672144,073
2001-021,8965252143,326
2000-012,0244672143,002

(Figures In Rs Crore: Source: Oil India )

National Aluminium Company

Nalco was incorporated in 1981 as a public enterprise. It is Asia's largest integrated aluminium complex and its functions cover bauxite mining, alumina refining, aluminium smelting and casting, power generation, rail and port operations. Table 4 shows the balance sheet of Nalco over the last five years.

Table 4: National Aluminium Company

YearTurnoverNet Profit/LossShare CapitalCapital Employed
2011-126,9278501,28910,805
2010-116,3701,0691,2898,798
2009-105,3108146447,834
2008-095,5311,2726446,628
2007-085,4741,6326447,031

(Figures In Rs Crore; Source: NALCO)

The data prior to 2007-08 was not available. As can be seen, NALCO has never reported a loss for the last five years.

Can the target be achieved?

The main idea behind disinvestment for the government is to raise Rs 30,000 crore. Table 5 gives a sense about how much funds can be raised by the proposed stake sale and the share price of the companies as on September 14, 2012.

Table 5: Fund Raising Plan

PSUGovt To Divest ( as % of equity)Total Equity (Rs Cr)No. of Shares to be Divested ( In Cr)Last Traded Price (Sept 14, 2012) (In Rs)Funds That can be raised at last price (Rs Cr)
MMTC9.331009.277787,212
Hindustan Copper9.594638.842692,377
Oil India106014.724862,293
Nalco12.151,28827.29541,473
Total 13,355

Thus, out of the total budgeted target of Rs 30,000 crore, around 45%, i.e. Rs 13,355 crore, can be raised through the present plan.

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