In another step towards the divestment of government stake in Container Corporation of India (Concor), an inter-ministerial group will meet on Thursday to clear the expression of interest (EoI) for the stake sale. The EoI is expected to be invited within 10 days’ time, sources said.
The inter-ministerial group (IMG) will include representatives from the Department of Investment and Public Asset Management (Dipam), the Ministry of Railways and Concor. After being cleared by the IMG, the EOI is expected to get the final nod from a group of secretaries within 10 days.
This comes after a roadshow conducted by Dipam got a positive response from several major players in the sector, including Maersk, the world’s largest container shipping line and vessel operator. The Danish shipping major participated in the second round of the pre-expression of interest (EoI) roadshows. The other players who participated in the roadshows include JSW Group, Essar Ports, I Squared Capital, Sojitz Corporation, Adani group, D P World, and PSA Singapore.
The Concor disinvestment process – which was cleared in November 2019 – allows the government to sell about 30.8 per cent in its holding of 54.8 per cent in the company to private players. The roadshows for Concor were organised to bring clarity to possible investors about the land licensing fee, which was a major roadblock in the Concor disinvestment process.
Based on Concor’s current market cap of Rs 46,674.9 crore, a 30.8 per cent stake in the company is valued around Rs 14,376 crore. Concor is considered to be crucial to meet the disinvestment target of Rs 65,000 crore set for the current fiscal year. Centre has mopped up around Rs 28,383 crore in divestment receipts, so far, in this financial year.
On September 7, the Cabinet Committee on Economic Affairs (CCEA) approved a proposal to lower LLF rates for new players to 1.5 per cent of the value of land, from 6 per cent. The annual escalation in fee was lowered to 6 per cent, from 7 per cent earlier. The decision was made to attract private investment in railway land. This is likely to attract more private players towards the divestment process.