Exclusive: Govt may consider divestment in 10 new PSUs via privatisation or OFS route

Cabinet secretary Rajiv Gauba-led divestment panel recently met on May 20 to review the divestment pipeline. CNBC-TV18 learns from sources that the Centre may look at 10 new public sector undertakings (PSUs) for divestment either through privatisation or Offer-for-sale (OFS) route.

CNBCTV18 learns as many as seven PSUs are likely to have been discussed including Neyveli Lignite, KIOCL, SJVN, HUDCO, MMTC, General Insurance of India, New India Assurance for divestment, which could be either through privatisation or OFS route.

Besides, three more PSUs—Indian Railway Finance Corp, Rail Vikas Nigam, Mazagon Dock Shipbuilders—are going to hit the market again under the Minimum Public Shareholding norms. An OFS for the above three is likely between FY22-24.

Under the minimum public shareholding norms of SEBI, as many as 19 PSUs are yet to comply. The listed companies need to comply with at least 25 percent public shareholding as per SEBI norms.

The Cabinet Secretary has sought quick timelines and follow-ups on strategic divestment, sources added that DIPAM and NITI Aayog have been tasked to draw up a roadmap of the strategic divestment candidates as per the New Public Sector Enterprises Policy.

The New PSE Policy was notified by the government on February 4, 2021. It classified strategic and non-strategic sectors for PSUs under the New PSE Policy. In strategic sectors, the government will retain control in bare minimum PSUs and privatise/merge or close remaining enterprises. In the non-strategic sectors, it will consider PSUs for privatisation or closure.

Finance Minister Nirmala Sitharaman announced a divestment target of Rs 1.75 lakh crore for FY'22 in the Union Budget this year, comprising mostly of privatisation and strategic disinvestment.

The target is ambitious as in FY21, the FM's budgeted target of raising Rs 2.1 lakh crore was missed as the pandemic put paid to the government's plans.

The divestment target was fully stalled in the initial five months of FY21 due to the pandemic, forcing the Centre to reduce its target to Rs 32,000 crore.

The largest disinvestment of the last fiscal was Rs 8,847 crore receipts received from the government's entire stake sale of 26.12 percent in Tata Communications Ltd (TCL).

The other notable receipt in FY21 was the 15 percent stake sale in Rail Vikas Nigam Ltd via an OFS that garnered Rs 543 crore, reducing the government's stake in the PSU to 75.68 percent.