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A planned strategic sale of two Steel Authority of India Ltd (SAIL) plants expected to be completed by 31 March will not add to the government’s divestment receipts for this fiscal, a finance ministry official said on Tuesday, requesting anonymity.

The sale proceeds will instead go directly to the state-run steelmaker as the two plants are its subsidiaries, the official said, adding that this is despite the Department of Investment and Public Asset Management (Dipam) handling the disinvestment process.

The finance ministry is hopeful of completing the strategic sale of SAIL’s Salem (Tamil Nadu) and Bhadravati (Karnataka) steel plants in this fiscal through March, the official said.

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“Alternative mechanism for disinvestment headed by home minister Amit Shah has cleared the business transfer agreement (of SAIL’s plants) that will be shared with qualified bidders and their comments will be sought. In this case, the financial bids may come before March, but security clearance, competition commission clearance may take some time depending on who qualifies. We are still hopeful of the transaction getting completed in FY21. We are keeping our fingers crossed," the official said.

Dipam had on 4 July 2019 sought expressions of interest in the sale of the two plants.

It had appointed SBI Capital Markets Ltd as the transaction adviser following an in-principle approval from the Cabinet Committee on Economic Affairs for strategic disinvestment of several state-run companies.

If successful, this would be the first strategic disinvestment of this fiscal. Mint had reported on 24 December that privatization of Bharat Petroleum Corp. Ltd (BPCL) may spill over to the next fiscal.

Strategic disinvestment of BPCL was crucial for the government to achieve its disinvestment target of 2.1 trillion for FY21 as the sale of India’s second-largest fuel retailer is expected to fetch the government at least 45,000 crore. So far this year, the government has garnered 12,225 crore through minority stake sales and initial share sales of Mazagon Dock Shipbuilders Ltd.

While the finance ministry had missed the disinvestment target of 65,000 crore for FY20 by 14,701 crore, it is likely to miss the target again due to the covid induced economic downturn

SAIL owns and operates five integrated steel plants at Bhilai, Bokaro, Durgapur, Rourkela and the IISCO Steel Plant in Asansol. It also owns the Chandrapur ferro alloys plant and three special steel plants: Alloy Steels Plant (at Durgapur in West Bengal), Salem Steel Plant (in Tamil Nadu) and Visvesvaraya Iron and Steel Plant (at Bhadravati in Karnataka).

Sail recorded total revenue from operations of 61,025 crore in FY20.

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