50 CPSEs May Hit Mar­ket Soon, Govt Looks to Cut Stake in Listed Firms

The Economic Times - - Economy: Macro, Micro & More - Our Bu­reau

New Delhi: As many as 50 state-run firms could be listed on stock ex­changes soon, with the gov­ern­ment putting out rules and guide­lines for big­gest-ever plan to in­vite pub­lic par­tic­i­pa­tion in its profit-mak­ing en­ter­prises. It will also bring down share­hold­ing in al­ready listed firms to 75%.

On Fri­day, the De­part­ment of In­vest­ment and Pub­lic As­set Man­age­ment (DIPAM) is­sued the mech­a­nism for list­ing of state-run firms, an­nounc­ing the de­tails of the de­ci­sion an­nounced in the Bud­get.

“The gov­ern­ment will put in place a re­vised mech­a­nism and pro­ce­dure to en­sure time-bound list­ing of iden­ti­fied CPSEs,” fi­nance min­is­ter Arun Jait­ley had said.

The gov­ern­ment will look to list all its com­pa­nies that have a pos­i­tive net worth, no ac­cu­mu­lated losses and have earned net profit in three pre­ced­ing con­sec­u­tive years.

Ac­cord­ing to Pub­lic En­ter­prise Sur­vey 2014-15, there are 157 profit-mak­ing com­pa­nies, of which 45 are listed. Some of the prof­itable com­pa­nies are Air­ports Author­ity of In­dia, Cen­tral Ware­hous­ing Cor­po­ra­tion, Maga­zon Dock Ship­builders and ONGC Videsh. As many as 50 com­pa­nies meet all three con­di­tions, an as­sess­ment will be made ev­ery year ac­cord­ing to the guide­lines put out. The ad­min­is­tra­tive de­part­ment or DIPAM will draw the list of el­i­gi­ble Cen­tral Pub­lic Sec­tor En­ter­prises for list­ing within one month from the fi­nal­i­sa­tion of au­dited ac­counts of the last fi­nan­cial year.

“The de­part­ment will work closely with the ad­min­is­tra­tive min­istry to en­sure that time­lines set by the gov­ern­ment for list­ing of CPSEs is ad­hered to,” said DIPAM sec­re­tary Neeraj Gupta. In case of is­sue of fresh eq­uity in con­junc­tion with the sale of gov­ern­ment stake (pig­gy­back trans­ac­tions) for list­ing, the Union Cabi­net’s ap­proval will be sought by the ad­min­is­tra­tive min­istry. The gov­ern­ment aims to list the state-run com­pa­nies within165 days of the agree­ment by the ad­min­is­tra­tive min­istry on their list­ing. An em­pow­ered com­mit­tee will be set up to en­sure that the time­line is ad­hered to. The com­mit­tee will be headed by DIPAM sec­re­tary.

“Both ad­min­is­tra­tive min­istries and CPSEs un­der­stand the ad­van­tage of list­ing and ac­cess­ing cap­i­tal for ex­pan­sion,” said Gupta.

For FY2017-18, the gov­ern­ment has set a mam­moth dis­in­vest­ment tar­get of ₹ 72,500 crore, of which ₹ 46,500 crore is to come from reg­u­lar stake sales, in­clud­ing ETFs.

Pur­su­ing its strate­gic sales pro­gramme, and bring con­sol­i­da­tion among PSUs, the gov­ern­ment has in­vited ap­pli­ca­tions for en­gage­ment as ad­vi­sors for seven firms.

Ac­cord­ing to Pub­lic En­ter­prise Sur­vey 2014-15, there are 157 profit-mak­ing com­pa­nies, of which 45 are listed

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