Centre’s disinvestment plan set to get a major boost

Thirty cash-rich PSUs including ONGC, NTPC, Power Grid, ONGC Videsh and BHEL will start buying back a portion of their own shares during the year

GN Bureau | August 8, 2016

#BHEL   #NTPC   #ONGC   #PSUs   #disinvestment   #Power Grid  

 This financial year promises to be a bumper year for the government when it comes to disinvestment revenue. As many as 30 cash-rich PSUs including ONGC, NTPC, Power Grid, ONGC Videsh and BHEL will start buying back a portion of their own shares during the year, according to the Financial Express. The government is expected to earn around Rs 80,000 crore through this.

 According to the report, although all of these are unlikely to materialise in the current financial year, a major chunk of the funds might flow into government coffers before April, 2017. The Centre’s disinvestment target for the year is Rs 56,500 crore. So far, the government has raised Rs 3,183 crore so far in 2016-17 via disinvestment in NHPC and sale of small portions in Indian Oil and NTPC to their employees.
 On May 27, the Centre issued a capital restructuring order mandating every central PSU with net worth of above Rs 2,000 crore and cash and bank balance of over Rs 1,000 crore to exercise the option to buy back their shares with effect from FY17. The boards of the PSUs will have to take a decision in this regard by September 30. Even though PSUs can seek exemption from the requirement citing capex and other requirements, no firm has approached the department of investment and public asset management (DIPAM) for such relaxation so far.
Five PSUs — Coal India, NMDC, MOIL, Nalco and Bharat Electronics —are already in the process of buying back a portion of their shares, that could fetch the centre about Rs 13,500 crore. It takes 2-3 months to execute buyback by a firm. Other PSUs likely to join are NHPC, REC, Oil India, Neyveli Lignite, SJVN, Indian Renewable Energy Development Agency, South Eastern Coalfields, Shipping Corporation, Northern Coalfields, Central Coalfields, Mahanadi Coalfields, Western Coalfields, BPCL, Engineers India and Mazagon Dock.
 The companies have been asked to buy back shares to the extent they can by the amount equivalent to 25 percent of the aggregate of their fully paid up share capital and free reserves. At end-March 2015, CPSEs had a surplus cash of about Rs 2.55 lakh crore.



Other News

Governance Now journalists win award for best TB reporting

Governance Now on Thursday bagged the REACH Media Awards for 2017-2018 for best reporting (English category) on tuberculosis (TB) at an event co-hosted by REACH, USAID and Lilly Global Health in partnership with the Lancet Commission on Tuberculosis. Our cover story

Simple facts about Special Status states

N Chandrababu Naidu-led Telugu Desam Party (TDP) on Friday parted ways from the BJP-led National Democratic Alliance (NDA) at the centre. The official quitting of the alliance was preceded by the pulling out of two ministers out of the Narendra Modi government, a week ago. The

Peak performance

What is Narendra Modi’s biggest electoral success during the current term as prime minister? At first blush, most would say the Uttar Pradesh victory. That would be looking at the obvious (UP is the heart of the Hindi heartland) and at mere numbers (it has the maximum Lok Sabha seats). Yes, it was a

On a dangerous tangent

The killing of a seven-year-old boy at Ryan International School, Gurgaon, suddenly brought focus on violence by students in school. It was a gruesome case indeed: On September 8 last year, Barun Chandra Thakur dropped his children, including seven-year-old Pradyuman, at school around 8 am. By the time he

Juvenile crime and punishment

Like our jails, our correction centres for juvenile offenders are hardly conducive to bringing about positive change. No one will dispute the fact that an underaged criminal, especially if he or she is a first-timer, needs to be given a chance to reform, however heinous the crime. Unfortunately, society&rs

If you’re happy and you know it...

Finland has emerged as the world’s happiest country, as per the World Happiness Report 2018. The report has ranked 156 countries by their happiness levels, and 117 countries by the happiness of their immigrants. This year, the main focus of the report is on migration within and between countries.

Current Issue

Current Issue


CM Nitish’s convoy attacked in Buxar


Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter