The government is looking for asset valuers to carry out valuation of two unlisted PSUs — Projects & Development India Ltd (PDIL) and Hindustan Prefab, in another move towards meeting its disinvestment revenue targets through strategic sale or equity stake sale in the state-run companies.
While the government is seeking an outright sale of PDIL to strategic buyers, it is looking at a possible merger with a similarly placed CPSE for Hindustan Prefab, PTI reported citing unidentified sources.
The asset valuer for PDIL will be appointed by the Ministry of Chemicals and Fertilisers, while the valuer for Hindustan Prefab will be named by the Ministry of Housing and Urban Poverty Alleviation, the report said.
Indian government has undertaken strategic sale of stake in profitable PSUs to help boost up state revenue and bridge the fiscal deficit, but has repeatedly fallen short of its disinvestment targets in the past. It has a target to earn Rs 56,500 crore by divesting its stake in public sector undertakings in the current financial year 2016-17, out of which, it has already earned Rs 31,000 crore. It has an even more ambitious disinvestment target of Rs 72,500 crore in the next financial year.
PDIL and Hindustan Prefab valuers would look into at least five different asset valuation methodologies, including relative peer review, discounted cash flow, balance sheet method and transaction multiple, for arriving at a valuation of the assets of these public sector undertakings, PTI reported.
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The last date for sending in application for PDIL is February 28 while for Hindustan Prefab it is March 2.
PDIL is into consultancy and engineering, providing services for design, engineering and related project execution in fertiliser, oil and gas, refinery, chemical and infrastructure sectors. Hindustan Prefab primarily manufactures prefabricated housing units to provide shelter to the displaced persons from West Pakistan.
The strategic sale of PDIL and Hindustan Prefab is likely only in the next financial year 2017-18, the report added.
Among other marquee disinvestment projects for the next year, the government plans to launch its second CPSE ETF – the exchange-traded fund of public sector enterprises; and seeks to sell 10% equity stake each in three state-run railway companies IRCTC, Ircon and IRFC via an IPO (initial public offer) in the next financial year 2017-18.
Earlier last month, the Union Cabinet also approved listing of five state-run general insurance companies, which is likely to begin only in the next financial year with the first listing possible by September-October.