Coal News We love to talk!

AUG 30 2017

Centre set to jump start privatisation process after 13 years

  • Economic Times, ET Bureau / Hyderabad
  • Created: Wed 30th AUG 2017

 

The government, which had drawn up a plan for strategic sales in 20-odd PSUs including profitable ones such as Bharat Earth Movers (BEML), is now ready to jump-start the process. If the plan materialises, India will be revisiting privatisation of public sector units nearly 13 years. On October 27 last year, the Cabinet gave an in-principle approval to start the process for strategic sales in a clutch of PSUs or their units.

The department of investment and public asset management has since named transaction and legal advisers and asset valuers for each of these.  “A lot of preparatory work has been completed. Bids for individual companies will be invited soon for strategic disinvestments,” an official said. The stake sales would happen through a two-stage auction (technical and financial) process as recommended by a core group of secretaries on disinvestment.

For 2017-18, the government has set an ambitious disinvestment target of Rs 72,500 crore, 58% higher than the receipt of Rs 46,247 crore in 2016-17. It plans to raise Rs 46,500 crore from disinvestment in PSUs, Rs 15,000 crore from strategic disinvestment and Rs 11,000 crore from the listing of general insurance companies this year.

Though the target is stiff, the Centre could reach the high disinvestment target this year thanks to its proposed 51.11% stake sale in HPCL  to ONGC for about Rs 30,000 crore, a planned new diversified exchange-traded fund and initial public offerings in nearly 10 PSUs. The government may mop up about Rs 14,000 crore from a 10% stake sale in NTPC via the OFS that opened on Tuesday.

It has seven more PSUs lined up for OFS including IOC, PFC and NHPC, which could fetch it another Rs 24,000 crore. So far this year, the Centre has garnered Rs 9,302 crore in disinvestment receipts, including Rs 4,153 crore from strategic sales from its Suuti holdings. The PSUs in which the government will shed management control include the profitable BEML, in which it would shed 26% to bring down its holding from 54% now to 28%. The company made a profit of Rs 73 crore in FY17. Companies in which the Centre could sell 100% holding are Scooters India, Pawan Hans, Hindustan Newsprint, Ferro Scrap Nigam, Bridge & Roof Company India, Bharat Pumps and Compressors, Project & Development

Tags

National Hydroelectric Power Corporation Ltd. Power Finance Corporation ONGC NTPC Ltd Ministry of Power Hindustan Petroleum Corporation Limited Public sector units India ongc

Related News

  • India and US launch $ 95 million clean energy projects under OPIC financing  Read more
  • NTPC's plans to add capacity may boost power equipment firms  Read more
  • Government approves supply of cheap LNG to power plants; move to rescue investments worth Rs 60,000 cr  Read more
  • What to expect from oil companies June quarter numbers  Read more
  • Gas price for ONGC may be slashed by 20 per cent, says CMD D K Sarraf  Read more
  • Coal India taps rising coking prices to woo steel sector  Read more
  • BPCL gets lower price; MRPL offers smaller lot  Read more
  • Commerce Ministry recommends safeguard duty on Chinese solar cells, modules  Read more
  • Up to 10% of CIL offer for sale may be set for staff  Read more
  • CILs cash pile under pressure as share buyback looms  Read more