Government Sells Entire Stake In Dredging Corp To Four State-Owned Ports
The government sold its entire stake in Dredging Corporation of India Ltd. to a consortium of four state-owned ports as it rushes to meet its divestment target for the ongoing financial year.
The government sold 73.44 percent holding in the company at Rs 510 apiece—a premium of 17 percent over Friday’s close—to Vishakhapatnam Port Trust, Paradeep Port Trust, Jawaharlal Nehru Port Trust and Deendayal Port Trust (erstwhile Kandla Port Trust). The share sale will fetch the government Rs 1,050 crore, according to RBSA Advisors, taking it closer to its Rs 80,000-crore divestment target for 2018-19.
The government’s stake in Dredging Corp is acquired in the following proportion according to RBSA Advisors:
- Vishakapatnam Port Trust: 19.47 percent
- Paradeep Port Trust: 18 percent
- Jawaharlal Nehru Port Trust: 18 percent
- Deendayal Port Trust: 18 percent
Also, the market regulator exempted the deal from a mandatory open offer, said RBSA Advisors, the adviser for the deal.
So far, the government mopped up Rs 35,533 crore—less than half of its full-year target. It’s also looking at buybacks and off-market deals to raise funds.
Meeting the divestment target is important to bridge the budget gap as lower tax collections and increased expenditure due to farm loan waivers may worsen the fiscal health of the country. To be sure, the government, in its interim budget 2019, revised the fiscal deficit target at 3.4 percent of GDP for the ongoing financial year from 3.3 percent earlier.