Finance Ministry Reworking Strategic Sale Procedure For CPSEs
The Finance Ministry is reworking the strategic sale procedure to ensure outright sale of central public sector enterprises within four months of issuance of documents to potential investors, a move aimed at ensuring speedier conclusion of the entire process, an official said.
However, for CPSEs like Air India, which are relatively bigger in size, the timeline for completion of strategic sale is likely to be fixed at six months from the date of issuance of preliminary information memorandum about the company.
Currently, there is no set timeline for concluding strategic sale of a state-owned company and the entire process, in some cases, drags on for months, if not years.
"The strategic sale policy is already in place, but the procedure needs to be streamlined so that the sale process is completed within three to four months' time. The thinking is that if a process cannot be completed in four months then it should be abandoned," an official told PTI.
Facing a daunting task of meeting the Rs 90,000-crore disinvestment target in the current fiscal, the Department of Investment and Public Asset Management will focus on outright sale of selected CPSEs, which have been pending for long. NITI Aayog has already identified 35 profitable and loss-making CPSEs which can go in for strategic sale.
"The procedure would be drafted in a way such that the process can go on simultaneously for more than one CPSE. For bigger CPSEs, the timeline for completion of sale could be extended till about six months," the official said.
The other CPSEs for which approvals are in place for outright sale include Hindustan Fluorocarbons Ltd., Hindustan Newsprint Ltd., HLL Life Care Ltd., Central Electronics Ltd, Bridge and Roof Company (India) Ltd., Nagarnar Steel plant of NMDC Ltd. and units of Cement Corporation of India Ltd. and ITDC Ltd.
The process for strategic sale of many state-owned companies started back in late 2017 or early 2018 but the transactions could not be concluded.
The DIPAM had issued preliminary information memoranda for sale of Pawan Hans Ltd., Bharat Pumps & Compressors and Hindustan Fluorocarbons in April 2018. For Scooters India and Hindustan Newsprint they were floated in March 2018, while for SAIL’s alloy steel plant it was issued in February and for Hindustan Prefab it was posted on website in October 2017. These transactions, however, could not be completed so far due to various reasons.
In last fiscal the government had raised Rs 84,972 crore from CPSE disinvestment, of which Rs 15,914 crore came in from strategic stake sale.
During the fiscal, state-owned NBCC (India) Ltd. bought the government’s stake in HSCC for Rs 285 crore. Besides, a consortium of four ports acquired the government’s 73.44 per cent stake in Dredging Corp of India Ltd. for Rs 1,049 crore, while National Projects Construction Corporation was sold for Rs 80 crore.