Review meet on disinvestment, privatisation of defence PSUs on Monday

Defence Minister Rajnath Singh will chair a meeting on Monday to review the divestment and privatisation of defence public sector undertakings (PSUs).

The minister would be apprised of the progress made in the privatisation of BEML where the government is looking to sell 26 per cent of the 54 per cent it holds along with transfer of management control. Based on the share price of the company, selling a 26 per cent stake to a strategic buyer could fetch the government around Rs 1,440 crore.

The government will soon approve the draft request for proposal and the share purchase agreement to privatise the PSU that has interests in defence, mining, construction and making rail coaches, said an official. The document will give the shortlisted bidders clarity on the liabilities they will have to take on.

The government also plans to reduce its shareholding in Mishra Dhatu Nigam Ltd (MIDHANI) and Garden Reach Shipbuilders & Engineers Ltd, and the proposal for the same will be shared with the Ministry of Defence, the administrative ministry of these PSUs, the official said. The Centre owns 74 per cent in MIDHANI, valued at around Rs 2,550 crore, according to the market closing price of the shares on Friday.

In Garden Reach Shipbuilders, the Centre owns 74.50 per cent, which is valued at around Rs 1,655 crore based on share closing price on Friday.

The plan to bring down the government’s shareholding and the broad timeline for the sale would be shared with the ministry. However, the exact time of the transaction would be decided based on prevailing market conditions, the official said.

As the government looks to complete the privatisation of big-ticket candidates such as Air India, Bharat Petroleum Corporation, among others, it has been decisively moving ahead by offloading minority stake in certain public sector entities to mop up its divestment receipts.

In the current financial year, the government has collected Rs 8,369 crore by selling shares of NMDC, Housing and Urban Development Corporation, and Axis Bank. The government has a target to collect Rs 1.75 trillion in disinvestment receipts in the ongoing fiscal year.