Get ready for new ETF, M&A deals in oil & gas, commodity market reforms

NEW DELHI: With the second tranche of CPSE EFT receiving good response from public, the government is likely to use the vehicle to carry on with its disinvestment programme in FY18, the Finance Minister said in the Union Budget for FY18. 

“A new ETF with diversified CPSE stocks and other government holdings will be launched in 2017-18,” the Budget note said. The response to the recent Further Fund Offering (FFO) was ‘overwhelming’ and the government is keen to use ETF as a vehicle for further disinvestment of shares, the Budget note suggested. 

“The disinvestment policy announced by me in the last budget will continue,” the FM said. The disinvestment target for FY18 is set at Rs 72,500 croreagainst Rs 56,500 crore set for FY17. The FY17 target was 2.2 times of what the government actually managed to garner, on an average, in the past six years. 

The Budget note underlined the need to strengthen CPSEs through consolidation, mergers and acquisitions. “By these methods, the CPSEs can be integrated across the value chain of an industry. It will give them capacity to bear higher risks, avail economies of scale, take higher investment decisions and create more value for the stakeholders. Possibilities of such restructuring are visible in the oil and gas sector,” the Budget note said. 

The FM pledged to create an integrated public sector ‘oil major’ that he said will match the performance of private oil and gas companies globally. The government said it would bring IPOs of railway institutions IRCON, IRFC and IRCTC. Meanwhile, it noted that there was a need to bring further reforms in commodities markets. An expert committee will be constituted to study and promote creation of an operational and legal framework to integrate spot market and derivatives market for commodities trading, the note said, adding that “e-NAM would be an integral part of such framework.” 

Comments

  1. alizybeth20 February 2019 at 20:08

    down the connection, so we are left high and dry.
    Moral of the Story: Do not go in for piped gas or take a house in a residential complex with piped LPG cooking gas. Have your own LPG connection. Oil and Gas Consulting

    ReplyDelete

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