Group of secretaries clears strategic stake sale in five companies

New Delhi: A group of secretaries on disinvestment today approved sale of government’s entire shareholding in four public sector companies – Bharat Petroleum Corp Ltd (BPCL), Shipping Corp of India (SCI), THDC India and NEEPCO, a CNBC-TV18 report said quoting Reuters. It also cleared a sale of 30% equity of Container Corp of India (Concor) from the government holding.

This is the biggest privatization of state-owned public sector companies proposed to be undertaken by an Indian government since the Atal Bihari Vajpayee dispensation in early 2000.

As far as stake sale of BPCL goes, the government will now have to seek the approval of the two Houses for its sale since the company was formed under an act of Parliament.

The government holds 53.29% stake in BPCL, 54.8% in Concor and 63.75% in SCI. THDC is a 75:25 joint venture between the Centre and the Uttar Pradesh government. Entire equity of North Eastern Electric Power Corporation Ltd (NEEPCO) belongs to the government.

At Monday's closing price of ₹470.05 on the BSE, sale of its entire stake in BPCL will fetch the government ₹54,055 crore. Concor stake sale will get the government ₹11,051 crore at the Monday closing price of ₹604.6 on the BSE. Stake sale in SCI will help the government earn ₹1,282 crore. Thus, exit from BPCL and SCI and sale of 30% equity of Concor will help the government collect ₹66,388 crore.

THDC and NEEPCO are unlisted companies and it is likely they could be handed over to NHPC and NTPC respectively, though no confirmation is available on that as yet.

The government has a target of mopping up ₹1,05,000 crore through sale of its holding in public sector companies. It has so far collected a mere ₹12,357.49 crore from the exercise. Sale of shares in the companies is crucial as the government struggles to adhere to its FY20 fiscal deficit target of 3.3%, under threat by the massive cut in corporate taxes to 22% from 30% and reduction in Goods and Services Tax (GST) while doing away with the short-lived super-rich tax.