The Narendra Modi government, which had drawn up rather ambitious plan for strategic sales in 16-odd public sector undertakings (PSUs), is set to commence the process: At least nine units including profitable BEML, Pawan Hans, Bridge & Roof Company India and Hindustan Prefabs will be up for grabs over the next few months. India’s last outright sale of a PSU was carried out in 2003-04. According to official sources, an inter-ministerial evaluation committee has recommended initiation of the steps to invite expressions of interest (EoIs) from potential suitors for the nine units. Bharat Pumps & Compressors, Projects & Development India, Hospital Services Consultancy Corporation, National Project Construction Corporation and Engineering Projects are among the other firms on the initial list for strategic sale. In a guidance note, the department of investment and public asset management (DIPAM) said strategic disinvestment process would involve a three-stage process — EoIs to identify serious bidders, request for proposal and bids, and completion.
During the EoI stage, preliminary information memorandum indicating the broad information about the CPSUs and criteria for qualification of potential bidders, would be shared, the sources said. The government will shed management control in BEML, in which it would shed 26% to bring down its holding from 54% now to 28%. BEML, a mining and construction equipment maker, reported a profit of Rs 73 crore in FY17.
On October 27 last year, the Cabinet gave an in-principle approval to start the process for strategic sales in a clutch of PSUs or their units. DIPAM has since appointed transaction and legal advisers and asset valuers for 15 of these units. Companies in which the Centre would sell 100% holding are Pawan Hans, Bridge & Roof, Bharat Pumps and Compressors, Projects & Development, Hindustan Newsprint and Hindustan Prefab. Three PSUs — Hospital Services Consultancy Corporation, National Project Construction Corporation and Engineering Projects India — would be sold to PSUs in the same lines of business.
The evaluation panel will soon take up the disinvestment cases of Ferro Scrap Nigam, Scooters India, Hindustan Fluorocarbon, Cement Corporation of India, Nagarnar Steel Plant of NDMC and SAIL units at Bhadrawati, Salem and Durgapur. For 2017-18, the government has set an ambitious disinvestment target of Rs 72,500 crore, up 58% from Rs 46,247 crore garnered in 2016-17. It plans to raise Rs 46,500 crore from disinvestment in PSUs, Rs 15,000 crore from strategic disinvestment and Rs 11,000 crore from the listing of general insurers this year.
So far this year, the Centre has garnered Rs 19,158 crore in disinvestment receipts, including Rs 9,118 crore from NTPC OFS and Rs 4,153 crore from strategic sales from its SUUTI holdings. The history of disinvestment in the country can be traced to the United Front government which set up the Disinvestment Commission in 1996. But it was the NDA government led by Atal Bihari Vajpayee which set the process in motion between 1999 and 2004.
It privatised more than a dozen PSUs to private companies, the most notable ones being IPCL, which was sold to Reliance Industries, and Bharat Aluminium Company and Hindustan Zinc, both of which went to Vedanta Resources.