Re-bid for non-core PSU telco assets soon

Industry:    2022-02-09

The government will go for re-bidding of non-core assets of telecom public sector units Bharat Sanchar Nigam Limited and Mahanagar Telecom Nigam Limited after it received a lacklustre response in the first-ever sale of non-core assets through auctions.

“The auction hasn’t really gained traction. Some bids have come for some flats in Mumbai but the land in Rajpura and Hyderabad has not seen any bidders. We will go for re-bidding,” a senior official said.

The government had put six properties of BSNL and MTNL for sale for a base price of Rs 970 crore through the MSTC portal back in November last year, through department of investment and public asset management (DIPAM).

BSNL properties were located in Hyderabad, Chandigarh, Kolkata and Bhavnagar at a reserve price of about ₹660 crore, while MTNL assets located in Vasari Hill, Goregaon in Mumbai were listed at reserve price of about ₹310 crore.

Monetisation of MTNL and BSNL non-core assets is part of the Rs 68,000-crore revival package announced by the Centre in late 2019. The government appointed CBRE South Asia Pvt Ltd, JLL Property Consultants (India), Cushman & Wakefield, and Knight Frank (India) Pvt Ltd as consultants for sale process.

MTNL provides telecom services in Delhi and Mumbai, while BSNL provides services across the country except for these cities.

While the first auction has been a disappointment, the government feels that the portal has been tested and can be used for selling non-core assets of other companies as well. The government will use the MSTC platform for selling non-core assets of PSUs, which will be coordinated by DIPAM.

Assets of other PSUs such as BEML and Shipping Corporation of India may follow as carve-out of their non-core assets has been made part of the preliminary information memorandum issued for strategic disinvestment.

The government has also identified several projects belonging to the central government under the ₹6 lakh crore National Monetisation Pipeline.

Even in the case of state-run companies not being divested, the government is strongly pitching for a carve-out of non-core assets or de-merging and selling them to generate revenue for capital expenditure, reduce debt and improve efficiency.

The DIPAM has advocated that central public sector enterprises should include asset monetisation and market capitalisation improvement in their memoranda of understanding with respective ministries.
Most state-run entities have big corporate offices, housing and land banks that may not be required for core operations. Indian Railways, for instance, has a lot of land around its stations.

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