DIPAM invites advisors for strategic sale of BPCL and four other PSUs

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New Delhi | Published: October 12, 2019 4:25:04 AM

Besides its 53.29% stake in BPCL, the core group of secretaries on disinvestment has recently approved the sale of its 63.75% stake in Shipping Corporation, 30% in Container Corporation of India (Concor), 100% in NEEPCO and 75% in THDC.

So far in the current financial year, the government has garnered 16% of its fiscal’s target.

Racing against time to conclude strategic sales, which will play a pivotal role to achieve the Rs 1.05 lakh crore-disinvestment revenue target in FY20, the department of investment and public asset management (DIPAM) on Friday invited request for proposals from eligible parties to work as transaction and legal advisors, and asset valuers for five PSUs.

Besides its 53.29% stake in BPCL, the core group of secretaries on disinvestment has recently approved the sale of its 63.75% stake in Shipping Corporation, 30% in Container Corporation of India (Concor), 100% in NEEPCO and 75% in THDC.

While the stakes in first three companies are to be sold to private parties, the stakes in NEEPCO and THDC are likely to be sold to another PSU, possibly NTPC.

The current market value of the government’s stake to be offloaded in these companies is estimated to be about Rs 90,000 crore— 86% of the disinvestment revenue target for this fiscal.

While inviting proposals from advisors, DIPAM named the administrative ministries but skipped naming the PSUs as Cabinet approval is still awaited for these sales.

The strategic disinvestment of BPCL would be crucial for the Centre to garner a record disinvestment receipt in FY20, up from Rs 85,000 crore in FY19 (helped by PFC purchase of the government’s stake in REC) and Rs 1 lakh crore in FY18 (thanks to ONGC’s purchase of the Centre’s stake in HPCL).

So far in the current financial year, the government has garnered 16% of its fiscal’s target.

With half of the year already over, the initiation of the processes for strategic sale is important from the point of view of executing the transactions, which could take at least five months.

The stake sales in these five PSUs are being fast-tracked even though formal Cabinet approval is expected later this month.

The strategic disinvestment process would be through a three-stage process — expression of interest (EoI) to identify serious bidders, request for proposal and bids, and completion.

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