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New Delhi: In line with the new public sector policy recently approved by the Cabinet, the government has initiated the disinvestment process of three Defence PSUs — BEML Limited, GRSE and Mishra Dhatu Nigam Limited (MIDHANI), said Minister of State for Defence Shripad Naik in the Parliament in a written response to a question on Monday. The statement comes in the backdrop of the announcement made by Finance Minister Nirmala Sitharaman in Budget 2021, in which she said that the government will retain bare minimum PSUs in strategic sectors and will either privatise, merge or shut down the rest. Since defence sector is a strategic sector, the government is going to keep some PSUs under its own control and is only going for minority stake disinvestment.
"Policy of disinvestment of minority stake without transfer of management control is being followed for priority sector including defence CPSUs to unlock value, promote public ownership, to meet the minimum public shareholding norms of SEBI and for ensuring higher degree of accountability. For non-priority sector where competitive markets have come of age, the policy of strategic disinvestment is followed," Naik told the Rajya Sabha.
The Centre plans on selling off 28 percent stake in BEML. Currently, the government holds 54.03 percent stake in the defence PSU. If it offloads 28 percent, the government's share in the company will be reduced to 26 percent. The management control of the company will go to a strategic player. The proposal for the strategic disinvestment of 28 percent share in BEML had received a nod from the Cabinet Committee on Economic Affairs in October 2016.
The products manufactured by BEML are – Tatra based high mobility (trucks), recovery vehicles, bridge systems, vehicle for missile projects, tank transportation trailers, military rail wagons, mine ploughs, crash fire tenders, snow cutters, aircraft towing tractors, aircraft weapon loading trolley, bull dozers, excavators, loaders, pile layers, wheel dozers, tyre handlers, rope shovels, dumpers, water sprinklers, motor graders, under mining equipment, integral rail coaches, metro cars, AC EMUs, OHE cars, steel and aluminium wagons, track laying equipment, utility vehicles, treasury vans, spoil disposal units, broad gauge rail.
The second defence PSU on the list is Garden Reach Shipbuilders & Engineers Limited (GRSE), Kolkata. The defence was listed on the bourses in 2018. Currently, the government holds 74.5 percent stake in the company and the rest 25.5 percent stake are held by public. The government is set to undertake minority stake disinvestment in GRSE.
The product manufactured by GRSE include, frigates, anti-submarine warfare corvette, missile corvette, landing ship tank, landing craft utility, survey vessel, fleet replenishment tanker, fast patrol vessel, offshore patrol vessel, inshore patrol vessel, WJ-FAC, hover craft, fast interceptor boat, portable bridges, deck machinery items, pumps, assembly and testing facilities for marine engine.
The third Defence PSU in the list is Mishra Dhatu Nigam (MIDHANI). MIDHANI is Hyderabad based Miniratna PSU. It manufactures super alloys, titanium and titanium alloys, special steel, other metal and alloys, bars, bright bars, wire, fine wire, sheets, Open-die forgings, Investment castings, fastener, armour products. Currently, the government holds 74 percent of the equity shares in the Defence PSU. Since the PSU is crucial to providing raw materials to the defence industry, the government is likely to undertake minority stake disinvestment in the defence PSU. The final list of PSUs that will be retained within government control in each strategic sector will be finalised by Niti Aayog, according to the new public sector policy.
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