The Department of Investment and Public Asset Management (DIPAM) will focus on concluding the ongoing privatisation transactions, like IDBI Bank and BEML, and may not look at any new CPSE for a strategic sale in the next fiscal, a senior official said. DIPAM Secretary Tuhin Kanta Pandey in an interview to PTI said that no specific company is there in the list for Initial Public Offering (IPO) for next fiscal, but there would be share sale offers from subsidiaries of listed CPSEs.
Pandey said the combined market capitalisation of central public sector enterprises (CPSEs), banks and insurance companies has grown 500 per cent in past three years from Rs 15 lakh crore to Rs 58 lakh crore.
Also, Government of India’s equity holding has risen 4 times to Rs 38 lakh crore, from Rs 9.5 lakh crore in January 2021.
“There has been a huge value creation in public sector enterprises which has been due to robust performance, growth prospects, capital restructuring, consistent dividend policy as well as a calibrated disinvestment strategy, amid a positive Indian economy context,” Pandey said.
DIPAM, which manages government equity in public sector companies, is also working on privatisation of CPSEs where preliminary Expressions of Interest (EoIs) has been received from prospective bidders.
Pandey said the companies where EoIs have been issued and where initial bidder interest has already come in, those will be pursued in next fiscal.
“We are not looking at any further things at the moment. We are focusing on conclusion which we initially thought would be completed in this financial year but there is a spillover for some of the reason which is extraneous to us, we would like to follow up more effectively and go for culmination of those transactions,” Pandey said.
Strategic sale of a host of CPSEs, including Shipping Corporation, NMDC Steel, BEML and HLL Lifecare, besides IDBI Bank are in the pipeline and were targeted for completion this fiscal.
With regard to government stake dilution in Hindustan Zinc (HZL), Pandey said the plans for selling stake in tranches are facing uncertainties with respect to demerger plans of the management.
Last year too, Anil Agarwal-owned Vedanta had planned to sell its global zinc assets to HZL, a move which analysts saw as an attempt to tap into the erstwhile state owned firm’s huge cash pile. The government, which has a directorial position on HZL board, opposed the move over valuation concerns.
Agarwal-owned HZL now plans to demerge the company into three separate entities.
“We had setbacks there. Initially our intent was to exit in tranches and going to the market as per order of Supreme Court, but subsequently we had setbacks because of the certain decisions taken by the promoter and management which was not consistent with our objective, like related party transaction. Now there are more uncertainties around demerger. The Ministry of Mines is closely examining all those issues and until these uncertainties are resolved, investors are not going to be interested in the stock and forthcoming in our share sale,” Pandey said.
Promoter Vedanta group owns 64.92 per cent equity in HZL, while the government holds 29.54 per cent. The remaining around 5 per cent stake is with public shareholders.
In the interim budget 2024-25, the government has targeted to raise Rs 50,000 crore from other capital receipts which include proceeds from disinvestment and asset monetisation.