IDBI Bank and BEML remain on divestment priority list even as markets make the government jittery

The pace of disinvestment is likely to remain sluggish and the government will focus primarily on offloading stakes in already decided companies like IDBI Bank and BEML, according to people in the know.

The main reason for this is the volatility in the markets. Benchmark indices like the Nifty50 and the BSE Sensex are down almost eight percent in the past six months and there is fear of a recession in Europe and the US, which is likely to hit our markets too in one way or the other. Moreover, the US Fed-led rate hikes by central banks to target controlling inflation may play a spoilsport in market recovery.

People in the know have told Network18 that there isn't much enthusiasm for disinvestment from the political leadership too and the government has not yet decided on alternative names under the new policy of disinvestment.

Therefore, there is a growing fear that achieving the disinvestment target in the current year may become difficult.

The government is likely to focus on companies that have joined the process of disinvestment already like BEML and IDBI Bank in the first phase, that is till the situation in the market starts looking up again.

Further, sources indicate that the government may invite expression of interest (EoI) in a few weeks on IDBI Bank disinvestment. The central government is expecting clarity from the Reserve Bank of India on this matter before the end of July.

Earlier this month, the government said it has completed the strategic disinvestment of Odisha-based Neelachal Ispat Nigam Ltd (NINL) to Tata Steel Long Products Ltd (TSLP).