Shipping Corp, BEML, BPCL in final tender stage, to be privatized in next fiscal year: Union Finance Ministry
The Union government will carry out the strategic sale of Shipping Corporation, BEML and BPCL in the next financial year, in addition to the IPO of three public sector companies, including ECGC, a senior government official said.
The 2022-23 budget provided a divestment target of Rs 65,000 crore for the next financial year. This is significantly lower than the Rs 1.75 lakh crore estimate budgeted for 2021-2022. In the revised estimates, the target for 2021-2022 has been reduced to Rs 78,000 crore.
Department of Investment and Public Assets Management (DIPAM) Secretary Tuhin Kanta Pandey said next year’s target would be met through a mix of selling minority stakes in CPSEs, enrollment of CPSEs and strategic selling.
”We have several financial offers for Pawan Hans, we have to go further in this process. Shipping Corp, BEML and BPCL are in the financial offer phase. HLL Lifecare and PDIL are in the EoI phase. Also, in the next fiscal year we will opt for ECGC, WAPCOS and National Seeds Corporation listing and a sale of minority stake, but there we might have less bandwidth,’ Pandey told PTI.
When asked if the sale of Pawan Hans would close by the end of March, he replied “we have to see if we can manage”. We haven’t opened the bids yet so it would take some time to get the approvals.
The secretary said the process of splitting off core and non-core assets from Shipping Corporation and BEML was continuing, after which financial offers would be sought for their strategic sale.
Asked about the status of the BPCL privatization process, he replied: “We are stuck with the bidders and trying to speed up the process, so that they are ready to bid”. The government sells 52.98% of the capital of BPCL, 63.75% in Shipping Corporation of India, 26 percent in BEML and 51 percent in Pawan Hans. The state-owned ONGC is also selling its 49% stake in the company.
Elaborating on the divestment goal and the way forward, Mr. Pandey said that strategic selling is an ongoing process and it takes about 1 to 1.5 years for the whole process to be completed.
”That’s the reason for the rationalization of the target, because there are no easy choices. We only sell the equity value, which is the receipt from the government as the debt goes (to the buyers) with the company. When we say divestment objective, it’s an accounting term, it’s not a real term.
Last month, the government completed the sale of Air India for Rs 18,000 crore. The deal included Rs 15,300 crore buyout of AI’s debt by Air India and a cash payment of Rs 2,700 crore to the government.
”We are in a difficult area and it is much more important for us that a certain number of transactions are carried out. We don’t want our PSU market capitalization to fall artificially just because we want to increase our budget numbers,’ Pandey said.
In the current fiscal year, the government lined up the initial public offering (IPO) of the country’s largest insurer, LIC, which is expected in March. Draft documents for the public offering are expected to be filed with market regulator Sebi next week.