Finance ministry working towards speedier conclusion of strategic sale process for CPSEs

The finance ministry is working towards streamlining strategic sale procedure to facilitate outright sale of Central Public Sector Enterprises (CPSEs) within four months of issuance of documents to potential investors.

The move is aimed to ensure speedier conclusion of the entire process, an official told PTI.

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However, for corporate behemoths such as Air India, the timeline for completion of disinvestment may be fixed at 6 months from the date of issuance of Preliminary Information Memorandum (PIM) about the company.

Currently, the government has not set any timeline for concluding strategic sale of a state-owned company. In some cases, the entire process drags on for months, if not years.

"The strategic sale policy is already in place, but the procedure needs to be streamlined so that the sale process is completed within 3-4 months' time. The thinking is that if a process cannot be completed in 4 months then it should be abandoned," an official told PTI.

The Department of Investment and Public Asset Management (DIPAM) which faces a challenging task of meeting the Rs 90,000-crore disinvestment target in the current fiscal will ensure outright sale of selected CPSEs.

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NITI Aayog has already identified 35 profitable and loss-making CPSEs which can go in for strategic sale. "The procedure would be drafted in a way such that the process can go on simultaneously for more than one CPSE. For bigger CPSEs, the timeline for completion of sale could be extended till about 6 months," the official added.

The companies which have been picked for strategic stake sale by the government include Air India, Air India subsidiary AIATSL, BEML, Scooters India, Bharat Pumps Compressors, and Bhadrawati, Salem and Durgapur units of steel major SAIL.

Other CPSEs have already received government's nod for outright sale include Hindustan Fluorocarbon, Hindustan Newsprint, HLL Life Care, Central Electronics, Bridge & Roof India, Nagarnar Steel plant of NMDC and units of Cement Corporation of India and ITDC.

The process for strategic sale of many CPSEs started back in late 2017 or early 2018 but the transactions could not be concluded. The DIPAM had issued PIMs for sale of Pawan Hans, Bharat Pumps & Compressors Ltd, Hindustan Fluorocarbons Ltd in April 2018. PIMs for Scooters India and Hindustan Newsprint were floated in March 2018. The PIMs of SAIL's Alloy Steel Plant was issued in February, while that of Hindustan Prefab was posted on website in October 2017. However, these transactions could not be completed so far due to variety of reasons.

The government collected Rs 84,972 crore from CPSE disinvestment in the last fiscal, of which Rs 15,914 crore came in from strategic stake sale. During the fiscal, state-owned NBCC purchased government stake in HSCC for Rs 285 crore. Besides, a consortium of four ports bought government's 73.44 per cent stake in Dredging Corp of India at Rs 1,049 crore. National Projects Construction Corporation (NPCC) was sold for Rs 80 crore.

An amount of Rs 14,500 crore was raised by way of state-run Power Finance Corp buying government stake in REC.

So far in current financial year, the government has mopped up Rs 2,350 crore through disinvestment transactions.

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Edited by Aseem Thapliyal

With PTI inputs