With the United Progressive Alliance slamming its doors on divestment, corporates which were strategically eyeing public sector units have started looking at alternative options for growth. 
 
Taking the cue, Essar Shipping has started scouting for second-hand vessels now that the government has ruled out any divestment in Shipping Corporation of India. 
 
"With divestment not happening, the investment kept aside for Shipping Corporation of India will be used in acquiring vessels," an Essar Group official told Business Standard. 
 
The KK Birla-promoted Zuari-Chambal group will now focus on its proposed 1 million tonne urea project in West Asia now that National Fertilisers Ltd is no longer on the block. 
 
The group has looked at three countries in the region, including Egypt, to locate the $450 million project, Zuari-Chambal officials said. Earlier, with the NFL acquisition, the group intended to leapfrog into the league of the biggest fertiliser producers in the world. 
 
Jindal Stainless Ltd, which had come close to acquiring the Salem stainless steel plant of the Steel Authority of India Ltd, has now decided to look for a similar plant abroad. The company was looking at Salem's cold rolling plant as a forward integration. 
 
"The acquisition of Salem was strategic for us. With divestment not happening, we are looking for a cold rolling plant overseas," Jindal Stainless director (finance) Arvind Parakh said. According to him, the proposed acquisition could take place in South East Asia or Europe. 
 
The company has also decided to undertake a brownfield expansion of its cold rolling capacity at Hissar in Haryana as hopes of bagging Salem recede into the background. It will spend Rs 150 crore (Rs 1.50 billion) to up its cold rolling capacity from 90,000 tonnes per annum to 1,40,000 tpa. 
 
AV Birla group chairman Kumar Mangalam Birla had said on Saturday that the group, which was earlier eyeing the state-owned Nalco and NFL, will change its strategy and go for organic growth if the new central government decides not to privatise them. 
 
The UPA government has stated that none of the profitable PSUs will be sold and the government will resort to privatisation only in the case of financially weak units. Subsequent reports have suggested that no divestment might take place at all during the current financial year. 
 
The previous government had drawn up an ambitious divestment roadmap which included big companies like BPCL, HPCL, Nalco, NFL, SCI, STC and others. 
 
Arun Shourie, the union divestment minister in the Vajpayee government, had said the government could raise up to Rs 1,00,000 crore (Rs 1,000 billion) per annum from divesting its stake in PSUs. Towards the end of 2003-04, the government had successfully offloaded a part of its stake in ONGC and GAIL India Ltd for some Rs 13,000 crore (Rs 130 billion).

New Plans

• Essar Shipping: With SCI no longer an option, it is scouting for vessels.
• Jindal Stainless: With Salem out, it is looking for an overseas buyout.
• Chambal Chemicals & Fertilisers: With NFL not on the block, it will focus on West Asia for a urea plant.
• AV Birla Group: With Nalco out, it will look at organic growth.