Government looks to raise Rs 11,000 crore from listing of insurers
In line with the disinvestment target finance minister Arun Jaitley mentioned in the Union Budget on Wednesday, the government is ready with plans to divest Rs 11,000 crore worth of stake in public-se
NEW DELHI: In line with the disinvestment target finance minister Arun Jaitley mentioned in the Union Budget on Wednesday, the government is ready with plans to divest Rs 11,000 crore worth of stake in public-sector general insurance companies.
The government has targeted Rs 72,000 crore worth of divestment in the next financial year. Of this, Rs 46,500 crore will be mobilised through minority stake sale, while Rs 15,000 crore would be mopped up through strategic disinvestment.
“Besides strategic and minority stake sale, Rs 11,000 crore has been budgeted from listing of general insurance companies. The department will make best endeavour to meet the overall Budget target,” said Disinvestment Secretary Neeraj Gupta.
The goal of Rs 72,500 crore in FY18 is an ambitious target compared with Rs 45,500 crore the government had estimated to raise in the current financial year.
The Cabinet had recently given approved a reduction of stake in five state-owned companies to 75 per cent by listing them on the bourses. The Cabinet Committee on Economic Affairs, headed by Prime Minister Narendra Modi, agreed to listing five government-owned general insurance companies — New India Assurance Company, United India Insurance, Oriental Insurance Company, National Insurance Company and General Insurance Corporation of India.
The government’s stake in shares of these companies will be reduced from 100 per cent to 75 per cent in one or more tranches over a period of time.
The Department of Investment and Public Asset Management has already identified companies for strategic disinvestment and initiated the process in some cases. Bids have also been invited for consultants and legal advisors for the strategic sale of Project Development India and National Projects Construction Corporation (NPCC) and also Pawan Hans. Similarly, the government has sought applications for engagement of an advisor and a legal advisor for 100 per cent strategic disinvestment of Project Development India and Hindustan Prefab.