Govt to sell stake in 28 major PSUs and their subsidiaries
20 Nov 2019
The government has given ‘in-principle’ approval for divestment of stake in 28 central public sector enterprises (CPSEs), including subsidiaries, units and joint ventures, through sale of majority stake and transfer of management control, minister of state for finance and corporate affairs Anurag Singh Thakur informed the Rajya Sabha in a written reply on Tuesday.
Besides, in the case of certain other CPSEs, the government plans to sell minority stake without transfer of management control through various Sebi-approved methods, in order to unlock value, promote public ownership and higher degree of accountability, the minister stated.
Further, he said, the Cabinet Committee of Economic Affairs (CCEA) has been mandated to approve strategic disinvestment of CPSEs. There is no approval yet of the CCEA with regard to strategic disinvestment of Bharat Petroleum Corporation Limited (BPCL), Container Corporation and Shipping Corporation of India, he added.
Following is the list of 28 CPSEs, subsidiaries, units and joint ventures for which the government has given ‘in-principle’ approval for strategic divestment:
1. Project & Development India Ltd
2. Hindustan Prefab Limited (HPL)
3. Hospital Services Consultancy Ltd (HSCC)
4. National Project construction corporation (NPCC)
5. Engineering Project (India) Ltd
6. Bridge and Roof Co. India Ltd
7. Pawan Hans Ltd
8. Hindustan Newsprint Ltd (subsidiary)
9. Scooters India Ltd
10. Bharat Pumps & Compressors Ltd
11. Hindustan Fluorocarbon Ltd (HFL) (sub)
12. Central Electronics Ltd
13. Bharat Earth Movers Ltd (BEML)
14. Ferro Scrap Nigam Ltd.(sub)
15. Cement Corporation of India Ltd (CCI)
16. Nagarnar Steel Plant of NMDC
17. Alloy Steel Plant, Durgapur; Salem Steel Plant; Bhadrawati units of SAIL
18. Air India and its five subsidiaries and one JV.
19. Dredging Corporation of India
20. HLL Life Care
21. Indian Medicine & Pharmaceuticals Corporation Ltd (IMPCL)
22. Karnataka Antibiotics
23. Kamrajar Port
24. Indian Tourism Development Corporation (ITDC)
25. Rural Electrification Corporation Limited (REC)
26. Hindustan Petroleum Corporation Limited
27. Hindustan Antibiotics Ltd (HAL)
28. Bengal Chemicals and Pharmaceuticals Ltd (BCPL)
However, the underperformance of state-run companies in domestic stock markets is expected to weigh on the government’s ambitious asset sales target of ?1,05,000 crore this fiscal.
Some state-run firms, including Indian Bank, Chennai Petroleum Corp. Ltd, IFCI Ltd, Oriental Bank of Commerce, Central Bank of India, and Allahabad Bank, have lost as much as 35-55 per cent of their market value since April.
Finance minister Nirmala Sitharaman had in the Union Budget 2019-20 set a record disinvestment target for the fiscal, an increase from ?90,000 crore projected in the Interim Budget 2019-20.
The government has managed to raise a meagre ?15,483.05 crore so far. With only four months left for this fiscal to end, achieving the disinvestment target appears a tall task.
While PSU stock prices have fallen, PSU funds remain a tactical buy for equity mutual fund portfolios and retail investors because of their low valuations, coupled with chances of a strategic sale or divestment in public sector units.