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Home >News >India >Profitability is not a criterion for CPSE divestment: FinMin

New Delhi: The finance ministry on Tuesday informed Parliament that profitability of central public sector enterprises (CPSEs) is not a relevant criterion for disinvestment.

“As per the information available with the Department, 171 Central Public Sector Enterprises (CPSEs) are profit making and 84 are loss making as on 31st March 2020. In February 2021, the Government has, notified the New Public Sector Enterprise (“PSE") Policy. Profitability/ Loss of the CPSE is not a relevant criterion for disinvestment," minister of state for finance Bhagwat Kishanrao Karad said in reply to a question in Rajya Sabha.

Replying to a separate question, Karad said there is no proposal to disinvest HLL Biotech Limited (HBL). “However, HLL Lifecare Ltd in January 2021 invited expression of interest from vaccine/ pharmaceutical manufactures for use of HBL's existing facilities at Integrated Vaccine Complex (IVC), Chengalpattu on "as is where basis" for production of covid 19/ other vaccines. The extended date of submission of bid ended on 21 May 2021. No party submitted bid. Chief Minister, Tamil Nadu vide his letter dated 26.5.2021 had expressed interest in taking over the IVC project," he added.

The central government has garnered 7646 crore through disinvestment so far in FY22. It sold 1.95% stake in Axis Bank held through the Specified Undertaking of the Unit Trust of India (SUUTI) in May, and 7.49% stake in NMDC Ltd earlier this month. DIPAM has invited proposals from investment bankers and legal advisers to manage the initial public offering of Life Insurance Corporation which is expected to debut in the stock exchanges in the March quarter next year.

The government’s ambitious disinvestment schedule for FY22 may get delayed because of the second wave of the covid-19 pandemic. However, DIPAM is confident that the 1.75 trillion target is still achievable. With revenues expected to shrink for the second consecutive year in FY22, achieving the disinvestment target will be crucial for the finance ministry.

The offer for sale for 8% stake in Housing and Urban Development Corporation (HUDCO) Limited that opened on Tuesday could help the government garner 720 crore for its disinvestment kitty.

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