NEW DELHI: Strategic disinvestments will be the driver of the Centre’s ambitious plan to try and garner Rs 2.1 lakh crore from divestment proceeds this year, said disinvestment secretary Tuhin Kanta Pandey.
“Our focus will remain on strategic disinvestments. We will, of course, be going in for equity sales and debt Exchange-Traded Funds, but the main driver will be strategic disinvestments,” Pandey said in an interview with TNIE, adding that major sales would include those already lined up, including Bharat Petroleum Corporation Ltd (BPCL), Concor, Shipping Corporation of India (SCI) and BEML.
Though many analysts have raised doubts on whether the government will manage to achieve its highest-ever disinvestment target, especially since it is slated to just cross the 60 per cent mark on this year’s disinvestment target of Rs 1.05 lakh crore, the disinvestment department feels its focus on big-ticket strategic disinvestments will bring home the money.
“Ideally, we would like them to be in the first half of the next financial year,” the secretary said, adding, “Much of the work has been done …the process is going ahead.” “We select companies for disinvestment keeping in view whether they are a priority for the government to run or not,” Pandey said, explaining how the firms are picked up for strategic disinvestment.
Three factors are taken into account to check a PSU’s priority status or ‘not for strategic sale’ status: “whether they are vital to national security, perform sovereign functions of the government such as FCI performs, or because of market imperfections are virtual monopolies.”
The government currently holds 53.29 per cent stake in BPCL and 63.75 per cent equity in SCI. It intends to sell a strategic stake along with management control in both the companies. Sources said the government would be selling its entire stake in BPCL and that with management control should fetch it between Rs 60,000-70,000 crore.
BPCL had been formed by nationalising the erstwhile British-owned Burmah Shell India in 1970s. Concor is the only other big-ticket strategic disinvestment almost ready to be launched in the pipeline and it could fetch the Centre up to Rs 20,000 crore, according to market analysts.