Secretaries Panel To Shortlist Pses For Divestment

The high-powered committee of secretaries is likely to shortlist by June-end some public sector enterprises (PSEs) for divestment from the 15 recommended so far by the Divestment Commission.

Industry ministry sources said recommendations relating to all 15 PSUs would be evaluated by the empowered committee before a proposal is finalised for the cabinet, so that the budgetary target of mopping up Rs 4800 crore from divesting public sector enterprises shares is attained.

Opinion in the core group of secretaries is understood to be veering towards Gas Authority of India Limited and Mahanagar Telephone Nigam Limited from the list of PSUs sent by disinvestment commission apart from Indian Oil Corporation, selected by the cabinet last year.

 

The cabinet has already decided on further 5 per cent disinvestment in the IOC. Offloading of GAIL and MTNL shares to the extent suggested by the commission would be enough to realise the target for 1997-98,+ the sources said.

To meet the Rs 5,000 crore for the last financial year, the cabinet had selected Indian Oil Corporation and VSNL for further disinvestment though nothing could be realised.

Only about Rs 168 crore was mopped up in the previous year (1995-96) by way of disinvestment against an ambitious target of Rs 7000 crore.

The Disinvestment Commission had earlier warned that unless there was speedy implementation of the recommendations made in its successive reports, it would be difficult to achieve disinvestment of Rs 4800 crore envisaged in 1997-98.

The commission, headed by the former chairman of the Securities and Exchange Board of India, G V Ramakrishna, had recommended disinvestment of 4.73 per cent in MTNL, apart from a global depository receipt (GDR) issue of 60 million shares which is equivalent to ten per cent of holding.

In the case of GAIL, the commission had suggested offloading of 25 per cent shares and industry ministry sources foresee no problems in disinvestment of these three companies.

Asked about the outright sale of Modern Food Industries Ltd (MFIL) or divestment of majority holding india tourism development corporation (ITDC), the sources said sale of MFIL alone would not help attain the target because of its small equity base.

ITDC required major structural changes and the process could be time-consuming, they said while admitting that industry ministry, however, did not have formal consultation with concerned administrative ministries on the issue.

Only after approval of the cabinet on the disinvestment of select PSUs, the issues of pricing, lead managers and timing of the public offer could be decided upon, they added.

While selecting IOC and VSNL for disinvestment, the cabinet had kept the issue of pricing in abeyance in view of the continued downtrend at the capital markets and VSNL had finally gone in for a Euro-issue only earlier this year.