Centre mulls strategic disinvestment of several other PSUs
The Modi Government plans to go for aggressive strategic disinvestment of several State-owned companies and also reduce its stakes in many other PSUs to raise funds to offset the massive revenue loss it undertook in announcing corporate tax cut. Shares of many of these companies surged despite a massive correction in Sensex on Wednesday.
According to a CNBC-TV 18 report, the Government has planned to sell its entire stake in BPCL, Container Corporation, Shipping Corporation of India, THDC & NEEPCO. The proposal includes selling complete 75 per cent stake in THDC to NTPC.
In addition, the Government also plans to go for disinvestment of Power grid and raise Rs 20,000 crore in two tranches.
Shares of Power Grid Corporation of India was up by 4.10 per cent, third straight day of gain to touch a 52-week high level after reports that the Government seeks stake sale in the firm in FY20 itself. CONCOR share rose by 3 per cent and SCI 2.89 per cent while BPCL saw double digit gain in the last two days.
The Government has 53.29 per cent stake in BPCL, 54.79 per cent in Concor, 63.75 per cent in SCI, 75 per cent in THDC and 100 per cent stake in NEEPCO.
Meanwhile, the Government has already expressed its intent for 100 per cent stake sale in Air India.
Unlike in the past when the Government mostly went for selling its stake in the loss-making companies, the focus has now shifted to strategic disinvestment of profit-making companies. This is because finding a buyer for a loss making company was bound to be difficult exercise in a tough economic environment.
The Government will also not transfer its stake from one PSU to another in the name of disinvestment as was done in the case of ONGC acquisition of HPCL last year. As per its now disinvestment plan, the Government will offload its entire stake to some private bidder in case of strategic disinvestment.
In her Budget speech, Finance Minister Nirmala Sitharaman had set a disinvestment target of Rs 1.05 lakh crore for 2019-2020. This was Rs 15,000 crore more than the target of Rs 90,000 crore set by Piyush Goyal as the interim FM in the interim Budget on February 1.
Disinvestment proceeds for FY19 stood at Rs 85,000 crore, up 6.2 per cent from the Budget estimate of Rs 80,000 crore.
The Government is now likely to seek Cabinet nod for these strategic disinvestment proposals and then appoint consultant and merchant bankers for arriving at valuations. After this, the Group of Ministers on disinvestment headed by the Finance Minister will finalise the bid price and open the floor for sell.
Thursday, 26 September 2019 | PNS | New Delhi
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