The Department of Disinvestment (DoD) favours e-auction route for outright sale of ailing PSUs, like Tyre Corporation, as it would help the government fetch better price.
The e-auction route, sources said, is better than the paper-based tender method as the buyer has the option of revising his bid during the auction process.
The DoD has been planning outright sale of Tyre Corporation of India (TCIL) and has already invited expression of interest from entities willing to buy the company.
Under the e-auction route, the buyers would be required to submit their bids over the floor price to be fixed by the government.
As the buyer has the option to revise its bids, the government can hope to get the best price for outright sale of the PSUs.
While under the existing tender based method, there is no floor price and also there is no possibility of revision of bids by buyers.
Also, sources said, the e-auction method is transparent and gives the bidder an idea of fair market value of the PSU on the block.
Although the government plans to raise Rs 30,000 crore through disinvestment during the current financial year, no PSU has been able to access the capital market in the first five months of the fiscal.
The Department of Heavy Industry in July 2011 had prepared a proposal for a complete sell-out of TCIL, as it has been reporting losses for the last several years.
The outright sale of TCIL would help the government in inching towards meeting the disinvestment target set for the current fiscal.