The panel has decided to give three weeks especially when only two bidders -Kotak Mahindra and Videocon have responded to KPMGs advertisement which appeared on October 24, in regard to picking up 26 per cent held by the state government and UTI. State government sources told FE that three weeks would be given for KPMG, which has been appointed as the consultant to carry out the disinvestment exercise, to invite more EoIs from the interested parties. The issue of pushing Sicom further down the privatisation route has been under the governments discussions. However, UTIs desire to offload its stakes way back in February 2001 kicked off the disinvestment process.
Initially, the empowered committee at its meeting held on July 20, 2001, gave its in-principle approval for disinvestment of 11 per cent (of the total 49 per cent) by the state government in Sicom. UTI had offered to offload 15 per cent (of 40 per cent). It was decided to appoint a consultant for the evaluation of Sicoms shares and to suggest disinvesment route. KPMG was appointed as consultant in consultation with the state government and UTI.
KPMG used Discounted Cash Flow, Adjusted Net Asset Value and Earning Approach and arrived at the per share valuation of Rs 10.25, Rs 30.63 and Rs 13.51 respectively. Subsequently, the state government took a decision to offer 26 per cent under which UTI has to divest 14 per cent (earlier 15 per cent) and the government would offload 12 per cent (earlier 11 per cent).