With at least one buy-back announcement from PSUs every month, the government is expected to garner over Rs 16,000 crore in its disinvestment kitty over the next couple of months.
Besides the usual OFS (offer for sale) route for disinvestment, the newly created Department of Investment and Public Asset Management (DIPAM) has nudged PSUs to buy back shares if they have extra cash which are not put to use for capital expenditure.
The boards of five PSUs — Coal India, NMDC, Nalco, MOIL and Bharat Electronics — have cleared buy-back proposals.
Government holdings in these PSUs are in range of 75-81 per cent and the buy back would be conducted on a proportionate basis. Together, these buy backs would fetch over Rs 13,500 crore to the exchequer.
Besides, the government has already raked in Rs 3,183 crore from stake sale in NHPC, employee subscription in IOC and NTPC disinvestment.
“Buy-back announcements have been been made. We estimate over Rs 16,000 crore coming in as and when the buy-back process is completed over the next couple of months,” a top official told PTI.
This Rs 16,000 crore is more than half of the Rs 30,000 crore that the government has budgeted from minority stake sale in PSUs in the current fiscal.
In its capital restructuring guidelines, the DIPAM has mandated that every CPSE having net worth of at least Rs 2,000 crore, and cash and bank balance of over Rs 1,000 crore shall exercise the option to buy back their shares.
State-owned companies have cash and free reserves estimated at Rs 2.6 lakh crore and the newly created DIPAM has been entrusted with the task of ensuring its optimal utilisation.
“We have conducted two buy-backs last fiscal and it shows that the transaction has helped the company in improving the market capitalisation of the CPSEs,” the official added.
While renaming the Department of Disinvestment as DIPAM in the Budget, Finance Minister Arun Jaitley had said that the department “will adopt a comprehensive approach for efficient management of the government investment in CPSEs by addressing issues such as capital restructuring, dividend, bonus shares.”
Post this, DIPAM has helped exchequer garner Rs 4,500 crore through buy back of shares by cash rich Hindustan Aeronautics and Bharat Dynamics in March.