New Delhi: In the biggest privatisation drive ever, the Union Cabinet approved Wednesday the sale of government’s stake in blue-chip oil firm Bharat Petroleum Corp Ltd (BPCL), shipping firm Shipping Corp of India (SCI) and onland cargo mover Container Corp of India (Concor) as well as decided to cut shareholding in select public sector firms below 51 per cent to boost revenue collections that have been hit by slowing economy.
The Cabinet Committee on Economic Affairs (CCEA) approved sale of government’s entire 53.29 per cent stake along with transfer of management control in the country’s second-biggest state-owned refinery BPCL after taking out Numaligarh refinery from its fold, Finance Minister Nirmala Sitharaman told reporters here.
It also approved the sale of an entire 63.75 per cent government holding in Shipping Corp of India (SCI) and a 30.8 per cent stake in Container Corp of India (Concor). The government currently holds 54.80 per cent in Concor and will retain 24 per cent stake post sell-off but without any veto powers or management say, Disinvestment Secretary Tuhin Kanta Pandey said.
Besides, the government will sell its entire holding in THDC India and North Eastern Electric Power Corp Ltd (NEEPCO) to state power generator NTPC Ltd, the finance minister informed.
The government holds 74.23 per cent in THDCIL and 100 per cent NEEPCO. Sitharaman however, evaded a direct reply to the timeframe for the disinvestments and if the stake sale will happen during the current fiscal year ending March 31, 2020.
Pandey said the due process will be followed in privatisation and timeframe will depend on market interest.
The Cabinet has also approved reducing government stake in select PSUs such as Indian Oil Corp (IOC) to below 51 per cent while continuing to retain management control.
The management control will continue to be retained with the government after considering equity held by other state-owned companies in the divested firm.
The government, currently, holds 51.5 per cent in IOC and another 25.9 per cent through state-owned Life Insurance Corp of India (LIC), and explorers Oil & Natural Gas Corp (ONGC) and Oil India Ltd (OIL), and the government can potentially sell 26.4 per cent for about Rs 33,000 crore.
The stake sales are critical for the government to meet its disinvestment target of Rs 1.05 lakh crore set for the current fiscal year.
The government’s 53.29 per cent stake in BPCL is worth about Rs 63,000 crore going by its closing price of Rs 544.65 on the BSE. At current prices, the government’s 30.8 per cent stake in Concor is worth about Rs 10,800 crore, while stake sale in SCI will fetch just over Rs 2,000 crore.
Last year, the government had sold its entire stake in Hindustan Petroleum Corp Ltd (HPCL) to state-owned Oil and Natural Gas Corp (ONGC) for Rs 36,915 crore.
“The resources unlocked by the strategic disinvestment of these CPSEs would be used to finance the social sector/developmental programmes of the Government benefiting the public. The unlocked resources would form part of the budget and the usage would come to scrutiny of the public,” an official statement from the Finance Ministry said.
“It is expected that the strategic buyer/ acquirer may bring in new management/technology/investment for the growth of these companies and may use innovative methods for their development,” it added.
PTI