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Govt may rope in LIC, PSBs for disinvestment of these PSUs

After a formal nod to the disinvestment of five PSUs, the BJP government is likely to take up another batch of PSUs for disinvestment

Govt may rope in LIC, PSBs for disinvestment of these PSUs
Govt may rope in LIC, PSBs for disinvestment of these PSUs

New Delhi: After a formal nod to the disinvestment of five PSUs, the BJP government is likely to take up another batch of PSUs for disinvestment. However, this time, it could ask LIC or state-run banks to pick up its stake in the public sector companies. The list includes Engineers India Ltd (EIL), PowerGrid, National Mineral Development Corporation, SAIL, BHEL, Hindustan Copper, NHPC and Hindustan Organics Chemicals Ltd.

According to a report by a news wire, the BJP government is likely to consider cutting its stake below 51 percent as part of disinvestment in these PSUs. This would be in line with what Finance Minister Nirmala Sitharaman said during a recent press conference on November 20. Sitharaman had said that the government is considering cutting its stake to below 51 percent in certain PSUs, but will retain management control.

‘Disinvestment of PSUs will be on case-to-case basis’

The report quoted official sources as saying that no decision has been taken on this yet but names are being considered on the basis of the government’s stake in certain PSUs, the nature of their operation and the sectors where the private sector is already present and is largely non-strategic. Sources also said that while the defence and financial sector have been excluded, the government is going to consider the rest on a case-to-case basis.

In BHEL, current government stake is 63.17 percent and in NMDC, the Centre holds 72.28 percent. PowerGrid has 55.37 percent government holding and Engineers India has 55 percent stake resting with the government, Hindustan Copper has 76.05 percent and in Steel Authority of India, the government stake is 75 percent and NHPC has 73.33 percent stake and HOCL has 58.78 percent stake with the government.

Govt could ask LIC or PSU banks to pick its stake

According to sources, the government is considering asking LIC or state-run banks to pick up its stake in PSUs. This would allow the government to not just bring down its stake in a public sector company but also retain the management control.

The Cabinet Committee on Economic Affairs (CCEA) gave a nod to the disinvestment of five PSUs, including BPCL, and the reduction of the government’s stake in select public sector units to below 51 percent “while retaining management control on case-to-case basis, taking into account the government shareholding, and the shareholding of government-controlled institution.” “Post such reduction, government`s control will remain intact and, while retaining the management control, on a case-to-case basis decision will be taken,” Sitharaman had said on November 20.

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