BackGovt to revive strategic stake sale in PSUs
PSUs identified for strategic sale reportedly include profit-making Bharat Earth Movers and Certification Engineers International as well as loss-making Scooters India
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New Delhi: After 12-year hiatus, government is set to revive strategic sale of state-owned companies with the Cabinet likely to consider shortly the outright sale of stake in over a dozen PSUs including the profit making ones.
“The strategic sale will come up before the Cabinet very shortly," a top official said. NITI Aayog has prepared a list of public sector units (PSUs) where the government can sell its majority stake to private companies in order to bring in greater efficiency and professionalism in functioning.
Based on its suggestions, the department of investment and public asset management (DIPAM) has finalised a model of strategic disinvestment. PSUs identified for strategic sale reportedly include profit-making Bharat Earth Movers and Certification Engineers International as well as loss-making Scooters India.
The official said that while the government has been shedding a minority stake of 5-15% in state-owned companies across sectors through Offer for Sale (OFS), strategic disinvestment would bring down holding in the PSU to below 50%.
Finance minister Arun Jaitley had in his Budget for 2016 -17 set a target of garnering Rs20,500 crore from strategic sales this fiscal. The last strategic sale took place in Jessop and Co in 2003-04 under the NDA government headed by Prime Minister Atal Bihari Vajpyaee, when 72% of government stake was sold to Indo Wagon Engineering for Rs18.18 crore.
Incidentally, the first strategic sale in a PSU also happened under NDA rule in 1999-2000 when the government sold 74% equity in Modern Food Industries to Hindustan Lever for Rs105.45 crore. During 1999-2000 and 2003-04, the government had strategically divested stake in 16 PSUs to garner a total of Rs6,344.35 crore. These included sale of fuel retailer IBP Ltd to state-owned Indian Oil Corp (IOC) for Rs1,153.68 crore.
Indian Petrochemicals Corp Ltd (IPCL) was sold to Reliance Industries for Rs1,490.84 crore, Videsh Sanchar Nigam Ltd to Tata Group firm for Rs1,439.25 crore and Hindustan Zinc Ltd to Vedanta Group for a total consideration of Rs768.88 crore.
The official said DIPAM has worked out procedure as well as timelines for the strategic sale. The NITI Aayog reportedly has submitted to the Prime Minister’s Office (PMO) a list of profit making as well as sick units that can be divested. The list has not been made public so far.
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