Budget 2019-2020: Finance Ministry makes progress in strategic sale of 28 CPSEs

The Finance Ministry has made progress in strategic sale of 28 state-owned companies, of which three have already been sold off in the previous fiscal. The Department of Investment and Public Asset Management (DIPAM) had raised about Rs 85,000 crore from CPSE disinvestment in 2018-19, using a variety of instruments like Initial Public Offers (IPOs), Offer for Sale (OFS), Buyback, Exchange Traded Funds (ETF). This was more than the Rs 80,000 crore target set in Budget.

"Progress was made in respect of the 28 cases of Strategic Disinvestment approved by the Government, which are at different stages, with three companies strategically sold off during FY 2018-19, namely, Hospital Services Consultancy Corporation, Dredging Corporation of India (DCIL) and National Projects Construction Corporation (NPCC)," the Economic Survey tabled in Parliament said Thursday.

HSCC was acquired by NBCC India at a consideration of Rs 285 crore, while DCIL was bought by a consortium of four ports at Rs 1,049 crore. Besides, NPCC was acquired by WAPCOS for Rs 79.80 crore.

A major transaction for strategic acquisition of the government’s equity holding in Rural Electrification Corporation (REC) was completed by Power Finance Corporation (PFC) in an off-market deal at a consideration of Rs 14,500 crore.

While DIPAM raised Rs 45,080 crore during 2018-19 from CPSE ETF and Bhrarat-22 ETF, buy back of shares by 11 CPSEs (KIOCL, NALCO, NLC, CSL, BHEL, NHPC, IOCL, ONGC, NMDC, OIL and CIL) fetched Rs 10,669 crore.

Proceeds from listing of five companies (MIDHANI, RITES, IRCON, GRSE and MSTC) on the stock exchanges stood at Rs 1,914 crore, while OFS of Coal India fetched Rs 5,236 crore.

The Cabinet Committee on Economic Affairs has given 'in-principle' approval for Initial Public Offer of 7 CPSEs, - Telecommunication Consultants (India), RailTel Corporation India , National Seed Corporation India, Tehri Hydro Development Corporation, Water & Power Consultancy Services (India), FCI Aravali Gypsum and Mineral (India). Besides, it has cleared follow on offer (FPO) of Kudremukh Iron Ore Company Ltd.

Besides, listing of IRCTC, IRFC and NEEPCO earlier approved is also being taken up.

The survey further noted that DIPAM is in the process of creating a Debt-ETF to enable CPSEs to access the debt/ bond market to partially meet the capital expenditure needs by leveraging their aggregate strength. Adviser, Legal Adviser, and AMC have been appointed.

The new initiatives undertaken by DIPAM include focus on asset Monetisation, including sale of non-core assets of CPSEs under strategic disinvetment, immovable Enemy Property under the custody of CEPI, MHA, and assets of other CPSEs/PSUs/other Government organisation, including sick/loss making CPSEs.

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