Niti Aayog plans to recommend more candidates for privatisation even though the government is yet to initiate work for strategic sale of 20 PSUs already identified.
Niti Aayog is examining a fresh set of about a dozen companies, including Air India, Pawan Hans, ITDC, MOIL, Project Construction and Madras Fertilisers, for possible recommendation. Aayog sources confirmed to the Financial Chronicle that the think-tank is examining a fresh set of CPSEs from non-strategic sector for privatisation. After the study is completed, the report will be submitted to the prime minister’s office (PMO).
The Aayog has identified 74 sick PSUs that need to be either closed down or privatised. However, it has made final recommendation about 32 PSUs only. Some of the other candidates for privatisation would be from the expanded list of loss-making entities.
The government had targeted raising Rs 20,500 crore via strategic sale of PSU assets in 2016-17. However, the plan failed to take off.
As a consequence, the government could mop up just about Rs 46,000 crore last year against the original disinvestments target of Rs 56,500 crore. The Aayog has made a strong pitch for preparing a roadmap for selling off the 20 PSUs identified by it for strategic sale.
The government has set disinvestment target for the current year at Rs 72,500 crore, of which Rs 15,500 crore is to be mobilised via strategic sale. Kicking off its strategic sale plan for the current fiscal, the Union cabinet recently approved strategic sale in three ITDC-run hotels. The Modi government has revived strategic sale plan after a gap of 12 years. The last strategic sale was made in 2003-04 under the previous NDA government led by Atal Bihari Vajpayee. Apart from strategic sale, the government also plans to pursue divestment through minority stake sale (offer for sale and CPSE Exchange Traded Fund), share buyback. It also plans to expedite sale of its stakes in public and private sector companies held through Suuti. Last year, the government raised nearly Rs 11,000 crore by selling minority stakes in L&T and ITC through offer for sale. It mopped up over Rs 8,000 crore by selling minority stakes via CPSE ETF. The balance was mobilised through share buyback.
The government is bringing unlisted PSUs to the market for compliance with the Securities and Exchange Board of India’s 25 per cent public shareholding norms. Accordingly, the Union cabinet has accorded its approval for listing of 11 PSUs including Rail Vikas Nigam, Indian Railway Finance Corporation, IRCTC and North Eastern Electric Power Corporation. Ircon International, RITES Ltd, Bharat Dynamics Ltd, Garden Reach Shipbuilders and Engineers, Mazagon Dock Shipbuilders Ltd, MSTC and Mishra Dhatu Nigam are the other PSUs that will be taken up for public listing.
The listing of these PSUs will be undertaken following guidelines issued by the department of investment and public asset management (Dipam).
