Merchant Bankers To Find Buyers For Psus

The department of heavy industries has appointed merchant bankers to find buyers for 15 out of the 23 public sector companies where it has decided to divest 74 per cent of its equity stake.

SBI Capital Markets tops the list by winning the mandate for seven of the PSUs, which include HMT's bearing division, Cement Corporation of India, Bharat Pumps and Compressors Ltd, Hindustan Salts Ltd, Sambhar Salts Ltd, Bharat Leather Ltd and NEPA Paper Mills Ltd.

Coopers Lybrand has won the mandate for Scooters India Ltd and Hindustan Photo Films Ltd while I-Sec has won the mandate for Hindustan Cables and HMT's tractor division.

 

AF Ferguson has won the contract to find a buyer for NIDC and Lagan Jute Machinery Ltd while Industrial Credit and Investment Corporation of India has been mandated to find a buyer for Andrew Yule while Industrial Development Bank of India has been mandated for Tungabhadra Steel Products Ltd.

The Confederation Of Indian Industry(CII) which was invited by the ministry to assist the government in the divestment process has submitted a list of potential buyers from their member companies. who could be interested in the companies up for sale.

For Andrew Yule its has recommended the names of Reliance, Larsen and Toubro, Crompton Greaves and RPG group as potential buyers. Potential buyers for Engineering Projects India Ltd in the list include Triveni Engineering, Hindustan Construction Company and Larsen & Toubro are the names suggested by CII for potential companies to buy Bridge & Roof . Titagurh Paper, ITC Bhadrachalam, Orient Paper and Ballarpur are names suggested for buying NEPA Paper. The contenders for Engineering projects India Ltd include Triveni, Walchand group and Larsen and Toubro for Scooter India its includes Bajaj Auto, TVS group, LML Ltd and Kinetic Honda. while the names suggested for HMT's tractor division includes Mahindra & Mahindra, Eicher and TAFE amongst others.

In what is a major divestment effort the Industry ministry had identified 23 out of 48 PSUs under the administrative ministry for strategic sale of up to 74%. It has also taken an in principal decision to wind 9 public sector units which include companies like National Bicycle, Bharat Opthalmic Glass Ltd, Weighbird India Ltd amongst others. The 48 units under the ministry have a gross investment of Rs 6600 crore out of which 17 are profit making and and 31 are loss making.

The total profit from the 17 units is Rs 1028 crore while the losses from the 31 companies is Rs 1388 crore.

The merchant bankers who have been given the mandate will assist the government in identifying buyers, fixing up a price brand for the shares and identify the procedures which they would follow for selling the equity in each of the companies for which they have been given the mandate.