With a poor show so far on disinvestment, the government has identified a clutch of PSUs that would go on the block in the coming months even as it faces major challenges in the wake of FPI outflow and depressed investor sentiment.
The Prime Minister’s Office (PMO) has directed concerned ministries to clear pending issues in a time-bound manner to carry out stake sale.
Going ahead with strategic sale of BEML, the PMO has directed the Department of Defence Production (DoDP) to firm up expression of interest (EoI)/preliminary information memorandum (PIM) for offloading 26% in the company. The empowered committee (EC) will then finalise the sale documents.
“The EC is expected to finalise the EoI/PIM by the end of September,” an official said.
The Cabinet Committee on Economic Affairs (CCEA) had in October 2016 cleared the plan to disinvest 26% in BEML along with management control. The government currently holds 54.03% in the defence major.
As part of the disinvestment plan, the Department of Investment and Public Asset Management (DIPAM) had held a meeting in July this year on asset monetization of BEML.
The other key company headed for strategic disinvestment is Nagarnar steel plant of NMDC which had also been cleared by the CCEA. A Cabinet note on the proposal has received comments from various ministries.
“The PMO has asked Steel Ministry to expeditiously respond to CCEA note and allocation of dedicated mine for the steel unit,” the official said.
In order to get best value from the sale of Nagarnar steel unit, the government had decided to allocate a dedicated mine to the steel plant. The Core Group of Secretaries on Disinvestment (CGD) had earlier agreed “in-principle” for demerger of the NMDC.
The transaction of Nagarnar unit had been deferred in February, 2018 and the CGD decided to go for strategic sale after the steel plant was operationalised.
There are a few other companies such as Ferro Scrap Nigam Ltd (FSNL) which would go to a strategic buyer in coming months.
The government is set to flood the market with equity sale of PSUs as just six months are left in the current fiscal to meet the disinvestment target. As against a target of Rs1,05,000 crore in the FY20, the government has so far managed to raise Rs12,357 crore.
Source: Mint