Shares of state-owned companies such as HMT, ITI and Scooters India have rallied more than 9% each on reports that the government is likely to revert to the policy of using 25% of the disinvestment proceeds for reviving sick public sector undertakings (PSUs) and recapitalising the profitable ones from the next fiscal.

ITI has rallied 18% to Rs 28.80 with a combined 1.04 million shares have already changed hands on the counter, against sub 0.50 million shares that were traded daily in past trading days on the NSE and BSE.

HMT and Scooters India has soared 10% each at Rs 45.20 and Rs 35.65 respectively.

The government is likely to take some decision in the forthcoming Budget in the regard of using disinvestment proceeds as its three-year policy of using entire funds from disinvestment for social sector programmes ends on March 31, 2012, the report suggests.

Meanwhile, the PSU disinvestment candidates such as Hindustan Copper and MMTC have frozen at upper circuit of 10% and 5% respectively, while Dredging Corporation of India and NMDC are trading higher by 3-8% on the Bombay Stock Exchange.