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