While the government had set ambitious disinvestment targets for nearly 23 PSUs including Air India and BPCL this year, coronavirus has thrown a spanner into the same.
While the government had set ambitious disinvestment targets for nearly 23 PSUs including Air India and BPCL this year, coronavirus has thrown a spanner into the same. Merely days after Finance Minister Nirmala Sitharaman announced that the government will open private participation in all sectors under Prime Minister Narendra Modi’s Atma Nirbhar Bharat plan, the finance ministry had to again extend the deadline of its showpiece privatisation companies Air India and BPCL on Wednesday. For the current financial year, the government has set a target of divesting about Rs 2.1-lakh crore.
“Normally strategic disinvestment takes 8-9 months… To a lot of extent, Covid has put a brake on this because international travel has virtually stopped. To some extent, we have to grant extension to some of the EoIs that we have issued,” Tuhin Kanta Pandey, secretary, Department of Investment and Public Asset Management (DIPAM), said on July 22, The Indian Express reported. According to the revised deadlines, bidders can submit expression of interest (EOI) for stake sale in BPCL by September 30. The fresh deadline to bid for purchasing stake in Air India has also been extended to August 31.The deadline for stake offloading of other companies have also been delayed and big ticket stake sales may take time to materialize.
The government is looking to divest all of its stake in BPCL, which is one of the largest oil marketing and oil refining companies in India. BPCL is worth at least $10 billion and the government owns about 53% equity stake in the company. BPCL stake sale is crucial to reach the government’s FY21 disinvestment target.
Then there is Maharaja. The government has been trying to sell the cash burning airline for some time now and had initiated the divestment process for the national carrier in January. The government announced this year that it looks to sell 100% of its stake in Air India after it failed to secure a suitor with its earlier plans of selling 76% in Air India. Other than Air India and BPCL, the deadline for submission of EoI in Central Electronics Ltd has also been revised.