The Ministry of Shipping has indicated that it is not in favour of a proposal of the disinvestment department to sell part of government's stake in state-owned Dredging Corporation of India (DCI) as of now because of its low valuation.
"It (disinvestment in DCI) is not feasible at current valuations of the company," a Shipping Ministry official told PTI, adding that the company reported a profit of only Rs 39 crore in the last financial year (2010-11).
"The government has already divested 22.5% of its stake in (DCI...And it can only do so up to 25%... therefore not much scope is left and also the time is not ripe," the official said.
The Department of Disinvestment (DOD) had proposed that the government disinvest in DCI as part of efforts to achieve its target of garnering Rs 40,000 crore in 2011-12 by selling stakes and raising fresh equity in public sector units.
The government has so far disinvested five% stake in state-owned Power Finance Corporation this fiscal. It mopped up around Rs 4,700 crore from PFC's Follow-on Public Offer (FPO), which happened in May this year.
DCI's net profit had declined 80% to Rs 3 crore for the quarter ended June 30. The company had reported a net profit of Rs 15.76 crore during the same period of last financial year.
A Parliamentary Standing Committee on Transport, Tourism and Culture in its report had said that DCI has been given "shabby treatment" and forced to carry out certain commercial activities. It felt that the state-owned company had no autonomy.
Visakhapatnam-based DCI is engaged in dredging activities and provides its services in the areas of environmental protection, tourism, flood control, irrigation, power generation, port development, mining, reclamation, laying of off-shore pipelines.