Indianmandarins has learnt that a strategic stake sale in a public sector unit could happen this fiscal. Among the candidates figure in the list are Cement Corporation, Tyre Corporation of India Ltd, and Central Electronics Ltd.
The last strategic sale took place in Jessop and Co in 2003-04 where the government sold 72 per cent of its stake to Indo Wagon Engineering for Rs 18.18 crore. The first strategic sale in a PSU was carried out in 1999-2000 when the government sold 74 per cent equity in Modern Food Industries to Hindustan Lever for Rs 105 crore.
Basing on NITI Aayog's suggestions, the Department of Investment and Public Asset Management (DIPAM) is finalising a model of strategic disinvestment since all policies would have to be laid down afresh.
The Aayog recently submitted two separate - sick public sector undertakings and strategic disinvestment - reports to the Prime Minister's Office. It is in the process of submitting its third report.
The NITI Aayog report, which has not been made public, has suggested various models of strategic sale. For PSUs where the government stake is about 60 percent, it has recommended that it could trim it by at least 10 percent to professionalise its working, but retain management of the company. The Aayog, according to sources, is of the belief that small doses of stake dilution don't attract big investors.
For loss-making PSUs such as BSNL, it has suggested the government could consider selling it off. But, it could face challenges, especially labour issues.
It has also identified nearly two dozen such firms where revival plans have failed. The Aayog has suggested first revival and then disinvestment of entities such as Chennai Petroleum, Madras Fertilizers, and Bharat Pumps & Compressors Ltd.
The Aayog has also suggested that sick PSUs for their revival should not be encouraged to sell their capital assets such as land and units.
The Union Budget 2016-17 has earmarked Rs 20,500 crore from strategic disinvestment and had announced a new system wherein the NITI Aayog would identify the state-run firms for the purpose.
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Work apace on strategic sale of a PSU
By IndianMandarins - 2016-06-29 10:20:41
Indianmandarins has learnt that a strategic stake sale in a public sector unit could happen this fiscal. Among the candidates figure in the list are Cement Corporation, Tyre Corporation of India Ltd, and Central Electronics Ltd.
The last strategic sale took place in Jessop and Co in 2003-04 where the government sold 72 per cent of its stake to Indo Wagon Engineering for Rs 18.18 crore. The first strategic sale in a PSU was carried out in 1999-2000 when the government sold 74 per cent equity in Modern Food Industries to Hindustan Lever for Rs 105 crore.
Basing on NITI Aayog's suggestions, the Department of Investment and Public Asset Management (DIPAM) is finalising a model of strategic disinvestment since all policies would have to be laid down afresh.
The Aayog recently submitted two separate - sick public sector undertakings and strategic disinvestment - reports to the Prime Minister's Office. It is in the process of submitting its third report.
The NITI Aayog report, which has not been made public, has suggested various models of strategic sale. For PSUs where the government stake is about 60 percent, it has recommended that it could trim it by at least 10 percent to professionalise its working, but retain management of the company. The Aayog, according to sources, is of the belief that small doses of stake dilution don't attract big investors.
For loss-making PSUs such as BSNL, it has suggested the government could consider selling it off. But, it could face challenges, especially labour issues.
It has also identified nearly two dozen such firms where revival plans have failed. The Aayog has suggested first revival and then disinvestment of entities such as Chennai Petroleum, Madras Fertilizers, and Bharat Pumps & Compressors Ltd.
The Aayog has also suggested that sick PSUs for their revival should not be encouraged to sell their capital assets such as land and units.
The Union Budget 2016-17 has earmarked Rs 20,500 crore from strategic disinvestment and had announced a new system wherein the NITI Aayog would identify the state-run firms for the purpose.
