The Cabinet Committee on Economic Affairs (CCEA) on Friday approved the listing of seven public sector undertakings (PSUs) on the stock exchanges. These companies are Telecommunications Consultants India (TCIL), RailTel Corporation India (RCIL), National Seeds Corporation (NSC), Tehri Hydro Development Corporation (THDCL), Water and Power Consultancy Services (WAPCOS), FCI Aravali Gypsum and Minerals (FAGM), and Kudremukh Iron Ore Company (KIOC).
TCIL, RCIL, NSC, THDCL, WAPCOS and FAGM will be taken public through an initial public offering (IPO), while KIOC will be made public through the follow-on public offer (FPO) route, Law and Information Technology Minister Ravi Shankar Prasad said on Friday. "The listing of these PSUs on the exchanges shall unlock their value and encourage investor participation," he said.
Sources said these listings would likely be part of the Centre's disinvestment plans for 2019-20. None of these is expected to happen during this fiscal year or contribute to the 2018-19 disinvestment target of Rs 800 billion. The Department of Investment and Public Asset Management (Dipam) will issue a request for proposal to hire financial and legal advisors for each of these listings.
It will conduct roadshows with domestic and foreign institutional investors. It will also decide the timeline of the listings, depending on the market and sectoral conditions. An Alternative Mechanism, comprising Finance Minister Arun Jaitley, Minister of Road Transport & Highways Nitin Gadkari and minister of the concerned administrative ministry has been empowered to decide on the extent, mode of disinvestment, pricing, and the time of the listings.
The government has several other IPOs lined up for which Cabinet approval has been granted. These include Indian Railway Finance Corporation, Rail Vikas Nigam, Mazagon Dockyards, MSTC and several other defence and rail companies. All of these are expected to be completed before March 31.
As reported earlier, Dipam is confident that the disinvestment target for 2018-19 could be exceeded, and might go up to Rs 850 billion. For the rest of the year, the Centre plans to have another FPO for its Bharat 22 exchange traded fund, which could rake in around Rs 100 billion. It plans to complete the strategic sale of Pawan Hans, Central Electronics, Air India's ground handling subsidiary and Scooters India before March 31. There are also state-owned firms buying back shares, which could garner the exchequer Rs 120-150 billion. There could also be the offer-for-sale of general insurance companies GIC and New India Assurance.