Dredging Corporation of India Ltd’s shares zoomed as much as over 9% in the early trading today before paring gains on news reports that the government is mulling a strategic sale of its entire stake in the state-run dredging company in its latest disinvestment bid, alongwith outright sale of four other companies.
The divestment of the government’s 73.4% equity stake in Dredging Corp would fetch it about Rs 1,400 crore. Dredging Corp shares were trading up 3.2% at Rs 713, after rising to the day’s high of Rs 752.4. Meanwhile, benchmark BSE Sensex was up 0.51% at 31,215 points.
A group of secretaries on disinvestment has already approved the sale of the government’s entire stake in five companies, including Kamarajar Port, HLL Lifecare, Indian Medicines & Pharmaceutical Corporation Ltd, and Karnataka Antibiotics and Pharmaceuticals Ltd, PTI reported over the weekend citing unidentified sources, adding that the approval of the Cabinet Committee on Economic Affairs too would soon be sought for the same.
Indian government has undertaken strategic stake sale in profitable PSUs to help boost state revenue and bridge the fiscal deficit. It has an ambitious target to earn Rs 72,500 crore in the current financial year 2017-18 through sale of stake in state-run companies. The government raised Rs 46,247 crore through disinvestment In the last financial year 2016-17, the highest ever amount earned by sale of equity stake in PSUs, though falling short of the original target, as was expected.
Earlier last week, CNBC TV18 reported that the government is mulling gradual stake sale in the Navratna public sector shipping company Shipping Corporation of India, beginning with selling 26% equity in the first round. The government has already raised about Rs 1,200 crore by selling equity stake in HUDCO through an IPO in May.
Going further, it plans to launch its second CPSE ETF, and also seeks to sell 10% equity stake each in three major state-run railway companies IRCTC, Ircon and IRFC via IPOs. The Union Cabinet has also approved listing of five state-run general insurance companies, which is likely to begin only in the next financial year with the first listing possible by September-October. The government is also reportedly looking at selling 10% equity stakes each in the capital goods major Bharat Heavy Electricals Ltd and energy company Oil India Ltd.