Government Kicks Off Strategic Sale, Invites Bids From Advisers For Three PSUs

The government has kicked off strategic disinvestment exercise for this fiscal by inviting bids from advisers for sale of its controlling stake in three public sector undertakings of Container Corporation of India Ltd., North Eastern Electric Power Corporation and THDC India.

Earlier this month, the Union Cabinet cleared a proposal of 30 percent stake sale in Concor. Presently, the government has 54.80 percent shareholding in the company and with the stake sale, the government will lose the management control.

Besides, the Cabinet had cleared government's stake sale in power companies THDC India and NEEPCO to NTPC Ltd.

In strategic disinvestment, a buyer also takes the management control.

"Government of India is considering selection of transaction adviser/legal adviser/asset valuer separately for two strategic disinvestment of Government of India existing paid up equity shareholding in two CPSEs (Central Public Sector Enterprises) under the administrative control of Ministry of Power," the Department of Investment and Public Asset Management said while inviting bids.

THDC India is a 75:25 percent joint venture between the Centre and the Uttar Pradesh government. The central government owns 100 percent stake in NEEPCO.

Without naming Concor, a separate public notice said, the Government of India is considering partial disinvestment of its existing total paid up equity shareholding in a government company under Ministry of Railways along with transfer of management control.

Proposals are invited by Nov. 4 from reputed entities with required experience and eligibility to act as transaction adviser/legal adviser/asset valuer to assist and advise government in the process.

So far during the current financial year, the government has mobilised Rs 12,357.49 crore through disinvestment transactions, according to data available on DIPAM website.

The government is targeting to mobilise Rs 1.05 lakh crore from disinvestment proceeds and achieving this has become more critical after it doled out Rs 1.45 lakh crore stimulus by way of a cut in corporate tax.

Disinvestment proceeds will be critical for the government to meet the fiscal deficit target of 3.3 percent of the gross domestic product in the year ending March 31, 2020.

Officials said strategic sale may involve two-stage bidding beginning with an expression of interest or a preliminary intent showing bid, and a final financial bid. Pre-bid meetings with likely bidders and roadshows to attract potential investors will form part of the process to provide clarity on every aspect of the stake sale.

Also, a data centre will be set up for bidders to look for information on the PSUs up for sale, they added.

Officials said the idea is to complete the stake sale within an estimated timeframe of 4-5 months.

Besides, the Cabinet has given its nod to sell the government's entire 53.29 percent stake in Bharat Petroleum Corporation Ltd. and its 63.75 percent stake in Shipping Corporation of India.

The strategic disinvestment of the five PSUs is expected to fetch Rs 60,000 crore to the exchequer.