In less than a month of announcing plans to divest stake in three railway public sector units, the government on Monday kick-started the process by inviting expressions of interest (EoIs) from merchant bankers.
The government is considering divesting a portion of the paid-up equity share capital through an initial public offering (IPO) in Indian Railway Catering and Tourism Corporation Ltd. (IRCTC), IRCON International Ltd. and Indian Railway Finance Corporation Ltd. (IRFC), Finance Minister Arun Jaitley had announced in the Union Budget on February 1. The government holds 100 percent stake in the three companies.
In two separate tender notices published in various newspapers, the Department of Investment and Public Asset management (DIPAM) has sought EoIs from merchant bankers by March 16 for IRCTC and IRCON.
The divestment target for the financial year 2017-18 has been kept at Rs 72,500 crore. Of this, Rs 46,500 crore would be raised through disinvestment of minority stake and Rs 11,000 crore through strategic sale.
In his Budget 2017-18 speech, Jaitley had also said that the government will put in place a revised mechanism and procedure to ensure time-bound listing of identified Central Public Sector Enterprises (CPSEs) on stock exchanges as it will foster greater public accountability and unlock their true value.
Mechanism For Time-Bound Listing
The finance ministry on Friday released the revised mechanism and procedure for time-bound listing of CPSEs.
Among other instructions, the release by DIPAM said that the process of launching an IPO for a CPSE will be completed within five-and-a-half-months (or 165 days) of the proposal getting cleared by the department concerned.
Based on the success of the recently launched Central Public Sector Enterprise Exchange Traded Fund (CPSE ETF), the Budget had announced that the government will continue to divest stake in state-owned companies through the ETF route.
An ETF is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund.
The release said that the administrative ministry or department involved or DIPAM shall draw the list of eligible CPSEs for listing within one month from the finalisation of audited accounts of the last financial year, based on the criteria of a positive net-worth, no accumulated losses and having earned net profits in three preceding years.
India has 298 central public sector CPSEs, of which 235 are operational.
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