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DIPAM might take a look at sale of smaller CPSEs to bigger counterparts to fulfill FY21 disinvestment goal

The division would quickly internally put together an inventory of entities that could possibly be offered to different CPSEs, following which session could possibly be initiated by the executive ministries or departments, the official stated.

The disinvestment division may take a look at sale of smaller public sector firms to bigger ones as an alternative of privatising giant CPSEs within the present monetary 12 months because the COVID-19 pandemic would make it tough to scout for patrons.

As the fallout of the pandemic has impacted inventory market valuation of firms, an official stated the Department of Investment and Public Asset Management (DIPAM) should search for other ways to fulfill the steep goal of Rs 1.20 lakh crore budgeted from CPSE stake sale.

“We feel it would be difficult to privatise CPSEs (central public sector enterprises) in the current scenario as going ahead also the outlook is bleak. We will have to look at the option of strategic sale of smaller CPSEs to their sector counterparts,” the official stated.

The division would quickly internally put together an inventory of entities that could possibly be offered to different CPSEs, following which session could possibly be initiated by the executive ministries or departments, the official advised PTI. “In the current situation, it would be difficult to conduct roadshows and investor meets. Hence, CPSE stake sale through stock market like OFS (offer-for-sale) and IPOs (initial public offerings) too would be difficult this fiscal,” the official added.

The course of for big-ticket strategic sale of Air India and BPCL had already been set in movement however the COVID-19 outbreak has led to the federal government deferring bid submission deadline for these firms. Now, the final date for submission of bids for BPCL is June 13, and for Air India, it’s April 30.

The authorities is seeking to promote its total 53.29 per cent stake in gasoline retailer Bharat Petroleum Corp Ltd (BPCL), 100 per cent in Air India and 30.80 per cent of its 54.80 per cent stake in Container Corporation of India.

Last month, the federal government accomplished the strategic disinvestment of its 74.49 per cent stake in THDC India Ltd and 100 per cent stake in North Eastern Electric Power Corp Ltd to state-owned NTPC Ltd. It additionally offered 66.67 per cent in Kamrajar Port Ltd to Chennai Port Trust for Rs 2,383 crore.

In March 2019, state-owned PFC had acquired the federal government’s 52.63 per cent stake in REC for Rs 14,500 crore.
In 2018, state-owned ONGC has acquired the federal government’s total 51.11 per cent stake in oil refiner HPCL for Rs 36,915 crore.

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