A new approach towards capital management includes value creation, disinvestment, dividends, capital expenditure by CPSEs, and asset monetisation, and not merely chasing just disinvestment revenue target, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said. The government will undertake disinvestment in a calibrated manner without chasing a specific target, Pandey told Prasanta Sahu. Edited excerpts.
What is the composition of “miscellaneous capital receipts” head in the Budget?
There is no specific disinvestment target from now on even though disinvestment revenues will come under miscellaneous capital receipts. We are looking at about 18,000-20,000 crore from disinvestment and Rs 10,000-12,000 crore from asset monetisation in the revised estimate for 2023-24 (as against Rs 50,000 crore in FY24BE from disinvestments). Next year, Rs 12,000-15,000 crore is expected from asset monetisation and the rest from disinvestment, which is opportunity-linked.
Why the change in approach towards disinvestment?
Disinvestment and monetisation receipts are very small compared to the budget size of the government. We are not saying the fiscal match will be too much contingent on this. Secondly, disinvestment has to be in a calibrated approach. Strategic disinvestment transactions will come off depending upon whether the transactions will mature in that particular year. If it doesn’t, no revenue accrues.
The other one is the transaction which can be carried out relatively quickly (minor stake sales through offer for sale). But, valuation is also a very important issue in small stake sales. The market capitalisation of listed CPSEs and government banks/financial institutions increased fourfold from Rs 9.5 trillion in January 2021 to Rs 38 trillion now. It has benefited the government and minority shareholders equally.
What is the status of strategic disinvestments?
We will seek a quick conclusion of ongoing cases including IDBI Bank. Certain processes have to be followed before the transactions go through. In the IDBI Bank case, RBI is examining the proposals received.
Are there any IPOs planned for next year?
Some of our listed companies have housed their renewable assets in their subsidiaries, those subsidiaries can be listed. NTPC for example has a subsidiary which is likely to be listed.