Sunday, October 2, 2022

Divestment target: Minority stake sale to chip in Rs 15,000 cr before March-end

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New Delhi: At least five-six minority stake sale in various PSUs that are expected to fetch Rs 15,000 crore and the NTPC-THDC-NEEPCO deal are expected to help the government meet the revised divestment target of Rs 65,000 crore before the end of FY2019-20, a senior government official told PSU Watch on Thursday. “The government has already managed to raise Rs 35,000 crore through disinvestment so far. It is now relying on NTPC to buy the government stake in THDC and NEEPCO for Rs 15,000-16,000 crore. And the rest of the amount is expected to come in from a number of small minority stake sale in PSUs. We are on track to meet the disinvestment target,” the source said.

Divestment target: The minority stake sale in the offing

According to the source, the government is mulling Offer for Sale (OFS) for a number of PSUs like Coal India, NBCC, NLC, HUDCO and NALCO, among others. The Centre has already started the process for the OFS of minority stake in three defence PSUs — GRSE, HAL and BDL. The notifications for the same have been released between January and February so far. In addition, IRFC is also planning an IPO before the end of the financial year which is expected to fetch Rs 1,000 crore to the exchequer, the source said. IRFC has already filed draft papers with market regulator SEBI for its IPO.

Profitability not criteria for disinvestment

The source also said that profitability of a state-owned company is not a criteria for deciding whether a company will be disinvested or not. “The directive from Niti Aayog is very clear. Profit or loss is not a criteria for strategic disinvestment of a PSU. There are three criteria on which the Aayog decides whether a PSU will be taken up or not: national security, sovereign operations at an arm’s length and market imperfections. If the PSU does not meet these three criteria and is in a non-priority sector, then it can be taken up for disinvestment,” the person added.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Telegram. Join PSU Watch Channel in your Telegram and stay updated)

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