MUMBAI (Commodity Online): The Indian government on Thursday approved the public listing of all profitable public sector companies giving a boost to the disinvestment agenda of the UPA government.

The PSU stocks including, MMTC, STC and NMDC zoomed on the Bombay Stock Exchange (BSE) today owing to the increased buoyancy on the back of government decision.

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The union home minister P Chidambaram told on Thursday, “All profitable listed CPSEs should need the mandatory listing of 10 per cent public ownership. The government has also decided that all unlisted CPSEs, which have made profit in the past three years and have a positive net worth, should get listed on stock exchanges. The CPSEs would enter the market at an appropriate time.”

At present, there are over 40 listed state-run companies, and over 100 others, including telecom behemoth Bharat Sanchar Nigam Limited (BSNL), qualify for listing.

The decision will have a bearing on the mineral major NMDC and MMTC as the public shareholding in these companies is 1.62 and 0.67 per cent.

The sectoral index, BSE PSU index was up 3.74% to 8,780. Meanwhile, the benchmark index, Sensex was trading at 16,247 up by 1.15% from Thursday’s close.

Stocks including State Trading Corporation Of India Ltd (STC) (BOM: 512531) was up 14.40% at Rs.352.65, MMTC Ltd (BOM: 513377) gained over 15% to Rs.34,720, Dredging Corporation Of India (BOM: 523618) traded up 10.09% at Rs.498.40, Hindustan Copper Ltd (BOM: 513599) was up 10% at Rs.256.35.

Mining major, NMDC (BOM: 526371) was locked at 10% at Rs.338.40, Rashtriya Chemicals and Fertilisers was up 8.88% to Rs.71.75, Engineers India Ltd traded up 6.78% at Rs.1,274 and NHPC gained by 6.17% at Rs.32.70.

According to the Cabinet Committee on Economic Affairs (CCEA) approved a proposal entailing unlisted firms with three-year track record of net profit and positive networth to get listed on the stock exchanges.

The move by the government is likely to bolster the presence of PSUs in the bourses. The funds from such sale would be directly deployed for social sector schemes, instead of being routed through the National Investment Fund (NIF).

The government says that divestment is not selling family jewels, but it is essential to save the nation's finances. The government is staring at a fiscal deficit of 6.8% this year, a 16-year high. If the estimated sale happens, Prime Minister Dr. Manmohan Singhwould break the divestment record set by the Atal Behari Vajpayee government, which raised $6 billion between 1999 and 2004.

Use of disinvestment proceeds would free up government resources to that extent or bring down its fiscal deficit in line with targets set in the road map. The government targets fiscal deficit at 5.5% in 2010-11 and 4% in 2011-12.

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