Cabinet okays share sales in 7 CPSEs

MUMBAI: The government has approved share sales in seven central public sector enterprises (CPSEs) to unlock value and raise funds through share sales to meet its disinvestment target.

Those approved for listing by the Cabinet Committee on Economic Affairs (CCEA) include RailTel Corp India Ltd, Telecommunications Consultants India Ltd (TCIL), National Seeds Corporation Ltd, Water & Power Consultancy Services Ltd (WAPCOS), FCI Aravali Gypsum and Minerals (India) Ltd and Tehri Hydro Development Corp. All these will list through IPOs. CCEA also cleared a follow-on offer by Kudremukh Iron Ore Co.

“The listing of CPSEs on the exchange shall unlock their value and encourage investor participation in the CPSEs,” said Ravi Shankar Prasad, minister of law, electronics and IT, briefing reporters.

The alternative mechanism, comprising finance minister Arun Jaitley, minister of road transport and shipping Nitin Gadkari and the minster of the administrative ministry concerned, has been empowered to decide on the extent and mode of disinvestment along with pricing and timing.

The Cabinet also expanded the eligibility criteria for listing of CPSEs. Companies with a positive net worth and a net profit in any of the immediately three preceding financial years will be now eligible for listing. The earlier criteria stipulated positive net worth, no accumulated losses and net profits in the three preceding years.

Good Response to Pawan Hans

The government has realised ₹34,142.35 crore from disinvestment against the budgeted target of ₹80,000 crore in the current financial year. The third follow-on offer of the CPSE-ETF (exchange traded fund) in November 2018 was the biggest disinvestment transaction, raising ₹17,000 crore. Earlier this month, the Cabinet approved the sale of the governments entire 52.63% stake in power sector financier REC Ltd to state-run Power Finance Corp (PFC). The government will raise around ₹14,000 crore from the stake sale.

Department of Investment and Public Asset Management (DIPAM) secretary Atanu Chakrabarty had recently expressed confidence that the government will be able to meet its asset-sale target. He also said there was substantial interest in state-run helicopter service provider Pawan Hans in which the government is looking to sell its 51% stake. “Pawan Hans, for which an RFP (request for proposal) has been invited, has got substantial competitive interest,” he had said.

Original Article

Related Articles

Back to top button