Cabinet panel clears decks for listing of 11 PSUs, including IRCTC
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New Delhi: To abide by the mandated 25% public shareholding in companies and unlock their value, the Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved listing of 11 central public sector enterprises (CPSEs) in the equity market.
The list includes railway subsidiaries Rail Vikas Nigam Ltd, IRCON International Ltd, Indian Railway Finance Corp. Ltd, Indian Railway Catering and Tourism Corporation Ltd (IRCTC) and RITES Ltd.
Finance minister Arun Jaitley had announced in his budget speech on 1 February the government’s intention to list railway PSEs.
The other PSEs cleared for listing on stock exchanges include three defence ministry enterprises—Bharat Dynamics Ltd, Garden Reach Shipbuilders & Engineers Ltd and Mazagon Dock Shipbuilders Ltd—MSTC Ltd and Mishra Dhatu Nigam Ltd under the administrative control of the steel ministry, and North Eastern Electric Power Corporation Ltd under the power ministry.
CCEA also approved a discount of up to 5% of the issue price for retail investors and eligible employees of the 11 CPSEs with a view to ensuring wider participation by small investors in the disinvestment programme.
The government said in a statement that the stake sale may include offers of fresh shares for raising resources from the market. “However, actual disinvestment in respect of each CPSE along with the mode of raising resources has been delegated for decisions on a case-by-case basis to the Alternative Mechanism, headed by the finance minister,” it added.
The so-called Alternative Mechanism is a group of ministers headed by Jaitley which decides on the modalities of stake sale in public sector units.
The government set a target of mobilizing Rs46,500 crore from the sale of minority stakes and Rs15,000 crore from strategic disinvestment in the 2017-18 budget.
Under the new disinvestment policy, unveiled in the 2016-17 union budget, CPSEs having a positive net-worth, no accumulated losses and having earned profits in three preceding consecutive years are required to achieve mandatory listing norms of 25% public holding. It also spelt out the mechanism and procedure for time-bound listing of CPSEs.
After the Department of Investment and Public Asset Management (Dipam), along with the administrative ministry, identifies eligible CPSEs and takes CCEA approval, an inter-ministerial group (IMG) is to be constituted for the appointment of advisors/intermediaries within eight weeks from the date of constitution of the IMG.
Also, the listing of the CPSE on the stock market needs to be completed within 165 days of the administrative department giving its nod.