New Delhi: The disinvestment of Bharat Petroleum Corporation Ltd (BPCL) will get pushed to FY23 and will impact the government's disinvestment mop-up for the year, making it unlikely for the Centre to reach the Rs 1.75-lakh-crore target it had set for itself for FY22, Department of Investment and Public Asset Management (DIPAM) Secretary has said. In an interview to Mint, the Secretary said, "I don't think that we will be able to reach Rs 1.75 trillion target… that looks unlikely."
"It would have required BPCL transaction to close, but I don't think BPCL can close by March. So, therefore we have to go with a lesser number," said the DIPAM Secretary.
Explaining the reasons behind not expecting the BPCL disinvestment process to materialise in this financial year, Pandey said, "It's a question of it being a very large transaction, which sometimes poses problem especially in petroleum sector, which underwent a lot of upheaval in the one-and-a-half to two years. In competitive bidding, bidders have to be comfortable to bid, but we have not reached that stage yet."
While exuding confidence about Life Insurance Corporation (LIC) Initial Public Offer (IPO) being on track for March, the DIPAM Secretary said that the government is now primarily relying on the IPO and what other transactions can yield to finish off as close to the disinvestment target as possible. "LIC is a major event we're working on. The embedded value has been worked out till March, and now they are on course to work out September because the fund bifurcation between par and non-par has taken place, after the LIC Act amendment, which was crucial since earlier LIC had only one fund. September accounts have been prepared and approved, all of this information has been fed to the valuer and they're close to finalising it," said Pandey.
Talking about Neelanchal Ispat Nigam Ltd's (NINL) disinvestment, the DIPAM Secretary said that an announcement can be expected in this regard "very soon."
Commenting on the strategic disinvestment of Air India, the top bureaucrat said that it was a learning curve which posed a series of legal issues and challenges. "It has been very difficult, one due to covid, which caused huge difficulties in running any process. Second, it was Air India, a very complex organization having assets all over. Third, we had all kinds of obstacles—bidders' issue, enterprise value, bidding construct had to change, then the due diligence process, then you had courts… There were enormous challenges, but at the end of the day, we are now feeling relieved," said Pandey.
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