The Cabinet Committee on Economic Affairs (CCEA) on Thursday approved the sale of 5% government's stake in India Tourism Development Corporation (ITDC) and 1.02% in State Trading Corporation of India (STC) to make them compliant with public shareholding norms specified by the Securities and Exchange Board of India (Sebi).
As per the proposal moved by the disinvestment department, the stake sale would be done through the offer-for-sale (OFS) or auction route, which would fetch around R30 crore to the exchequer.
The government expects the 5% stake or 42.88 crore shares in ITDC to fetch R23.58 crore. Besides, it aims to garner about R10 crore through disinvestment of 1.02%, or 6.13 crore shares, in STC. The government currently holds 92.11% stake in ITDC and 91.02% stake in STC. The stake sale would help both companies meet the minimum 10% public holding norm of Sebi. The government is required to bring down its stake in these two companies to 90% by August 8.
At the end of 2012-13 fiscal, the paid-up capital of ITDC stood at R86 crore and earned a net profit of R19 crore. For STC, the paid-up capital stands at R60 crore and net profit at R18 crore for the 2012-13 fiscal. After the CCEA approval, an Empowered Group of Ministers on Disinvestment would decide the floor price for stake sale in the two companies.
The government plans to mobilise R40,000 crore through disinvestment in the current fiscal. In the first three months, it has raised R825 crore.