Disinvestment rakes in Rs 21,000 crore -Governance Now

Disinvestment rakes in Rs 21,000 crore

This is the highest-ever first half disinvestment revenue for any year

GN Bureau | October 3, 2016

#Disinvestment #PSUs #Coal India #NMDC #Nalco #Manganese Ore (India) #Bharat Electronics #NBCC #State Trading Corp #MMTC #NMDC #Oil India #National Fertilizers and Rashtriya Chemicals and Fertilizers

The government has raised Rs 21,000 crore through stake sales and buybacks in April-September 2016-17. This is the highest-ever first half disinvestment revenue for any year, raising expectations for the rest of the financial year.

While Rs 16,500 crore is said to have been raised from buybacks initiated by five central public sector undertakings (PSUs), the rest has come from five PSU stake sales through the offer-for-sale (OFS) route, according to a news report published in Business Standard.

The government has budgeted Rs 56,500 crore as the disinvestment target for 2016-17. Of this, Rs 36,000 crore is expected to come from minority stake sales and buybacks, while Rs 20,500 crore is expected to come from strategic sales in loss-making or profit-making PSUs or their assets like factories, warehouses, office buildings. So far, it has already achieved 37 percent of its target.

Coal India, NMDC, Nalco, Manganese Ore (India) and Bharat Electronics are the ones which have already carried out buyback. Also, from two OFS of NHPC and Hindustan Copper and three OFS for employees of NTPC, Indian Oil and Engineers India the government has managed to raise Rs 4,500 crore.

The reason for such encouraging proceeds from buybacks is due to the Department of Investment and Public Asset Management’s (DIPAM) new guidelines released in June on capital restructuring of state-owned companies. It states that every central PSU, with a net worth of at least Rs 2,000 crore cash and bank balance of Rs 1,000 crore, will have to exercise the option of buyback of shares. Thus, more is expected through this route for the rest of the year.

DIPAM has already started issuing request for proposals for merchant bankers, or appointed them altogether, for NBCC, State Trading Corp, MMTC, NMDC, Oil India, National Fertilizers and Rashtriya Chemicals and Fertilizers. It is also planning to take four PSUs public, namely Cochin Shipyard, Hudco, HAL and RINL. The first two are expected to happen over the next few months.

DIPAM is also handling the minority stake worth nearly Rs 60,000 crore that the centre holds in Axis Bank, ITC and Larsen & Toubro through specified undertaking of the Unit Trust of India (SUUTI). It has already appointed a panel of six merchant bankers for SUUTI.

The government also plans to launch a second CPSE exchange traded fund (ETF) by December. Also, the cabinet has approved the first strategic sale by the centre in 12 years, that of Allahabad-based Bharat Pumps & Compressors.

Comments

Other News

Report of India’s G20 Task Force on Digital Public Infrastructure released

The final ‘Report of India’s G20 Task Force on Digital Public Infrastructure’ by ‘India’s G20 Task Force on Digital Public Infrastructure for Economic Transformation, Financial Inclusion and Development’ was released in New Delhi on Monday. The Task Force was led by the

How the Great War of Mahabharata was actually a world war

Mahabharata: A World War By Gaurang Damani Sanganak Prakashan, 317 pages, Rs 300 Gaurang Damani, a Mumbai-based el

Budget expectations, from job creation to tax reforms…

With the return of the NDA to power in the recently concluded Lok Sabha elections, all eyes are now on finance minister Nirmala Sitharaman’s full budget for the FY 2024-25. The interim budget presented in February was a typical vote-on-accounts, allowing the outgoing government to manage expenses in

How to transform rural landscapes, design 5G intelligent villages

Futuristic technologies such as 5G are already here. While urban users are reaping their benefits, these technologies also have a potential to transform rural areas. How to unleash that potential is the question. That was the focus of a workshop – “Transforming Rural Landscape:

PM Modi visits Rosatom Pavilion at VDNKh in Moscow

Prime minister Narendra Modi, accompanied by president Vladimir Putin, visited the All Russian Exhibition Centre, VDNKh, in Moscow Tuesday. The two leaders toured the Rosatom Pavilion at VDNKh. The Rosatom pavilion, inaugurated in November 2023, is one of the largest exhibitions on the histo

Let us pledge to do what we can for environment: President

President Droupadi Murmu on Monday morning spent some time at the sea beach of the holy city of Puri, a day after participating in the annual Rath Yatra. Later she penned her thoughts about the experience of being in close commune with nature. In a message posted on X, she said: