The 2022-23 budget has projected a divestment target of Rs 65,000 crore for next fiscal year.
New Delhi:
The government will continue the strategic sale of Shipping Corporation, BEML and BPCL in the coming fiscal year, in addition to the IPO of three public sector companies, including ECGC, a top government official said.
The 2022-23 budget has projected a divestment target of Rs 65,000 crore for next fiscal year. This is significantly lower than the estimated Rs 1.75 lakh crore budgeted for 2021-22. In the revised estimates, the target for 2021-22 has been reduced to Rs 78,000 crore.
Tuhin Kanta Pandey, secretary of the Department of Investment and Public Asset Management (DIPAM), said the target for next year will be met through a mix of selling minority stakes in CPSEs, listing CPSEs and strategic selling.
“We have multiple financial bids on Pawan Hans, we need to move forward in that process. Shipping Corp, BEML and BPCL are in the financial bid phase. HLL Lifecare and PDIL are in the EoI phase. In addition, we are entering the next fiscal way for listing of ECGC, WAPCOS and National Seeds Corporation and a sale of a minority stake, but we may have less bandwidth there,” Pandey told PTI.
When asked whether the sale of Pawan Hans would be completed by the end of March, he said: “We have to see if we can make it. We have yet to open the bids and then it will take some time to get approvals”.
The secretary said that the process of splitting the core and non-core assets of Shipping Corporation and BEML is underway, after which financial bids would be invited for their strategic sale.
When asked where BPCL’s privatization process stands, he said: “We are stuck with the bidders and trying to speed it up so they are ready to bid.” The government is selling a 52.98 percent stake in BPCL, 63.75 percent in Shipping Corporation of India, 26 percent in BEML and 51 percent in Pawan Hans. State-owned ONGC is also selling its 49 percent stake in the company.
Pandey said strategic sales is an ongoing process and will take approximately 1-1.5 years to complete.
“That’s the reason for rationalizing the target, because there are no easy choices. We only sell the equity value, which is the government receipt, as the debt (to buyers) goes along with the company. If we say divestment target, it’s an accounting term, it’s not a real term”.
The government finalized the sale of Air India for Rs 18,000 crore last month. The deal involved Rs 15,300 crore of AI debt assumption by Air India and Rs 2,700 crore in cash payment to the government.
“We’re in a tough area and it’s much more important to us that a certain number of trades are executed. We don’t want the market cap of our PSUs to fall artificially just because we want to stop our budget numbers,” Pandey said.
In the current fiscal year, the government has drafted an initial public offering (IPO) of the nation’s largest insurer LIC, expected in March. The draft documents for the tender offer are likely to be submitted to market regulator SEBI next week.
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