NEW DELHI: The Union Cabinet on Friday approved a plan to list six Central Public Sector Enterprises (CPSEs) and dilute the government’s stake in Kudremukh Iron Ore Company Ltd (KIOCL) through a share sale.
The Cabinet Committee on Economic Affairs (CCEA), chaired by the prime minister, decided to list Telecommunication Consultants (India), RailTel Corporation India, National Seed Corporation (India), Tehri Hydro Development Corporation, Water & Power Consultancy Services (India) and FCI Aravali Gypsum and Minerals (India) on the stock exchanges through initial public offerings, law minister Ravi Shankar Prasad told reporters after the meeting.
The CCEA has also permitted KIOCL, which is already listed on bourses, to come out with a follow-on public offer (FPO).“We think it is a big reform. The Cabinet has given the in-principle approval. The administrative ministry concerned will now speed up its implementation,” Prasad said.
However, Prasad did not elaborate on the timing of the proposed share sales and said the ministry concerned will speed up its implementation. Later, the Cabinet note added that the Alternative Mechanism — comprising the finance minister, road transport minister and the minister of the administrative ministry concerned — had been empowered to decide on the extent, mode of disinvestment, pricing, time etc. of listed CPSEs (including those to be listed in future).
“Listing will help PSUs to unlock potential and value,” Prasad told reporters. The government has also expanded the scope of eligibility criteria for listing of CPSEs. “CPSEs with positive net worth and net profit in any of the immediately three preceding financial years shall be eligible for listing on the stock exchange,” the government said in a release.
The Cabinet has given in-principle approval for the strategic sale of 52.63 per cent government stake in Rural Electrification Corporation Limited to Power Finance Corporation Limited.
FALLING SHORT
The government has set a disinvestment target of D80,000 crore this fiscal year, but as per the latest data, the government has realised only Rs 34,142.35 crore as disinvestment proceeds so far. Last fiscal year, the total disinvestment proceeds were Rs 1,00,056.91 crore.