Hindustan Prefab Ltd to shut shop

The government has decided close down project management consultancy and construction firm Hindustan Prefab Ltd, putting at rest speculation about its revival by bringing in a strategic investor.

Government sources said that the Prime Minister's Office has directed the Ministry of Housing and Urban Affairs (MoHUA) to initiate closure of the company and prepare a final note for the Cabinet Committee of Economic Affairs (CCEA) in this regard.

"The process to sell entire 100 per cent government equity in the Hindustan Prefab under the strategic sale route has failed. While NBCC emerged as the only bidder for HPL, it also did not submit financial bid in the first iteration. There is little hope of reviving the company now and it is a fit case for closure," said a source looking at the government's strategic disinvestment plan.

A draft cabinet note proposing closure of HPL has already been moved by MoHUA and disinvestment department DIPAM has already given its comments on it. The final note is under preparation.

The government is looking to close the HPL also due to its low net worth of just about Rs 32 crore in FY18. The net profit of the company is a meagre Rs 1.93 crore on a turnover of Rs 238.45 crore.

The closure of HPL is also expected to be a less painful process as the company's manufacturing activities are already shut and it has been functioning for last few years with a meagre workforce of about 241 permanent employees including 148 workers and less than 93 officers. The company also holds land parcels, flat and commercial office space either under perpetual lease from the Land and Development Office or procured from other agencies.