The divestment issue was discussed at a meeting between representatives of financial institutions and finance ministry officials on Friday. "There is no problem of meeting the disinvestment target of Rs 10,000 crore this fiscal. The institutions are flush with funds and we can always unload the shares we buy at the right time to register good returns," an FI official said.

The institutions feel that investing their surpluses in disinvested stock may offer good opportunities for capital appreciation, he said. Those who attended the meeting included the chairman and managing director of IDBI, G P Gupta, CMD of ICICI K V Kamath, UTI chairman P S Subramaniam, LIC chairman GKrishnamurthy, HDFC managing director Deepak Parekh and State Bank of India chairman G G Vaidya.

The government side was represented by finance secretary Piyush Mankad, special secretary (banking) Devidayal and secretary in department of economic affairs E A S Sarma, among others.

Speaking to reporters after the meeting, Deepak Parekh, chairman of IDFC Ltd, said various issues were discussed including the setting up of a special purpose vehicle to be led by the Unit Trust of India to buy government holdings in select public sector undertakings that are to be disinvested before the end of the current fiscal.

"It was basically a brainstorming session and no concrete decisions were arrived at," he said adding that the meeting focussed on the disinvestment process.

Parekh said such meetings will continue on a regular basis and the next one is scheduled after 10 days. "We also discussed the possibility of giving navaratna status to more PSUs," he added. Other issues that came up for discussion included thefloatation of new domestic issues in the capital market for attracting retail investors, the feasibility of setting up a national shareholding trust as a non-profit body for facilitating disinvestment in a public sector enterprise, and the floatation of global depository receipts and American depository receipts.

When asked whether the resources of the financial institutions would not come under pressure on account of being made to pick up the shares, an FI official said that the selection of scrips would be done on the basis of its commercial viability. "There are many good shares that we can sell at the favourable time," the official said.

Asked whether the postponement of divestment of MTNL shares would not act as a deterrent for disinvestment, he said this was done only because the market at that time was not found suitable to provide higher returns.