Racing against time to meet the Rs41,000 crore disinvestment target for the current fiscal through stake sale in major PSUs, the Government plans to begin the exercise by divesting its share in State-owned entities like NMDC, Oil India ltd (OIl), MMTC, ITDC and Concor through offer for sale (OFS). To initiate the process, the Department of Disinvestment (DoD) has decided to sought bids for setting up a panel of merchant bankers, which will help it in sale of shares of these companies.
The Pioneer on July 2 had first reported about the DoD having called a meeting on the same date with key ministries to initiate the disinvestment process and announce names of companies in which Government could sell stake.
The meeting, which was attended by senior officials from the Petroleum, Steel, Commerce, Tourism and several other ministries, arrived at a consensus to form a panel of merchant bankers for a period of up to three years, which will assist the Government in the stake sale of the aforementioned companies, which have been grouped together in a basket, sources aware of the development, confirmed to this newspaper.
This group has been titled as Basket - 1, and once the stake sale process of these companies is completed, then other public sector companies which is on the DoD list for the current financial year, will be taken up and grouped together as Basket - II and so forth.
Meanwhile it was decided in the meeting that bids should be called from merchant bankers for setting up a panel of such bankers which will help the Government in the stake sale process of Basket - 1 companies.
Sources privy to the development said that till now, only a single merchant banker used to handle the stake sale process of a particular company. Now the Government has decided to form a panel of merchant bankers, which will have a tenure of up to three years, which will help the Government in divestment process of a bunch of companies.
Government plans to sell 10 per cent of its stake in mining major NMDC, which will mean that 39.64 crore shares of the company will be offered for sale. In MMTC, the Government will sell 15 per cent of its share (15 crore shares), while in OIl the Government will offer 6 crore shares for sale (10 per cent stake).
In ITDC the Government will sell 12.03 per cent of its stake, which will translate into 1 crore of its share available on sale. In Concor, 5 per cent of Government share will be offered for sale (97 lakh shares).
Meanwhile DoD has also called for bids to appoint legal advisors for sale of stake in five PSUs through an offer for sale (OFS), besides a follow on offer of the CPSE Exchange Traded Fund. These include NTPC, Hindustan Copper ltd (HCl), Engineers India ltd (EIl), OIl as well as Bharat Electronics ltd (BEl).
At the current market prices, the stake sale in five PSUs could fetch the exchequer around Rs11,500 crore. The disinvestment department plans to sell 15 per cent stake in HCl, 10 per cent each in OIl and EIl and 5 per cent each in NTPC and BEl.