Sources have told CNBCTV-18 that the government will soon finalise the Expression of Interest or preliminary bids for privatising Container Corporation of India (Concor). According to the sources, the Core Group of Secretary on Disinvestment (CGD) meeting is expected to be scheduled on January 30, chaired by the cabinet secretary. Foreign companies and foreign funds are likely to be allowed to participate in the preliminary bidding process. PSUs are expected to not be allowed to participate in the bidding.
Last week, an official said that the government will this month invite Expression of Interest or preliminary bids for privatising Concor. The official stated that the bid paper for Concor is nearly complete and has to receive approval from the "Alternative Mechanism," or more specifically, a group of key Cabinet ministers.
"We are trying hard to issue the Preliminary Information Memorandum inviting Expression of Interest (EoI) for Concor as quickly as possible. It should be issued this month, subject to approval," according to an official.
Brokerage house Macquarie has given an 'underperform' rating on Concor with a target of Rs 620 per share. The brokerage has noted that the third quarter EXIM handling volume indicates a further loss in market share.
The divestment of government's stake in the company will be a key catalyst.
The Cabinet approved the strategic sale of a 30.8 percent share in Concor out of the 54.80 percent government equity in November 2019 along with managerial control. After the sell-off, the government will still own a 24 percent share, but without any veto powers.
The share sale, however, remained on hold while investors sought clarification of the rail land lease regulations and licencing costs. The Union Cabinet in September approved a new policy that allows for long-term leasing of railway property for cargo-related businesses for up to 35 years at a rate of 1.5 percent of the land's market value per annum.
The conclusion of the Concor strategic sale would continue into the coming financial year, when financial bids from prospective investors would start to trickle in.
Concor, a Navratna PSU operating under the railway ministry, engages in container transportation and logistics. As of March 2022, it had 1,359 employees working at 61 container terminals. The government ran roadshows for Concor in October of last year to test investor interest.
The company's total revenue for the fiscal year 2021–2022 was Rs 7,857 crore, while its profit before tax was Rs 1,407 crore.
In comparison to the full-year budget target of Rs 65,000 crore, the government has so far in the current fiscal year realised Rs 31,106.40 crore through disinvestment in CPSEs.
(With PTI inputs)
First Published: Jan 11, 2023 6:30 PM IST
