New Delhi: The government plans to divest Rs11,000 crore worth of stake in public sector unit (PSU) general insurance companies to meet the steep disinvestment target of Rs72,500 crore next fiscal.
Of the total target, Rs46,500 crore will be mobilized through minority stake sale and Rs15,000 crore from strategic disinvestment. The goal of Rs72,500 crore is higher than Rs45,500 crore the government has estimated to raise in the current fiscal.
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“Besides strategic and minority stake sale, Rs11,000 crore has been budgeted from the listing of general insurance companies. The department will make the best endeavour to meet the overall budget target," disinvestment secretary Neeraj Gupta told PTI.
Recently, the cabinet approved the reduction of a stake in five state-owned general insurance companies to 75% by listing them on the bourses. The Cabinet Committee on Economic Affairs, headed by Prime Minister Narendra Modi, gave nod to listing five government-owned general insurance companies—New India Assurance Co., United India Insurance, Oriental Insurance Co., National Insurance Co. and General Insurance Corp. of India (GIC).
The government shareholding in these companies will be reduced from 100% to 75% in one or more tranches over a period of time. As for strategic disinvestment, the department of investment and public asset management (DIPAM) has already identified companies and initiated process in some cases.
The government has invited bids for consultants and legal advisor for the strategic sale of Projects & Development India Ltd (PDIL) and National Projects Construction Corp. Ltd (NPCC), besides Pawan Hans.
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As for the NPCC, the government has decided to disinvest 100% of its shareholding through the merger with a similarly-placed central public sector enterprises (CPSE). Similarly, the government has sought applications for engagement of an advisor and a legal advisor for 100% strategic disinvestment of PDIL and Hindustan Prefab Ltd (HPL).
The last date for sending in the application for PDIL and NPCC is 3 February while for HPL, it is 6 February.