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.
 

Comments

 

Other News

Look who’s talking ethics in Karnataka?

 Just after the UP assembly election in 1996, I was among the scores of reporters waiting at Kalyan Singh’s residence, waiting to get the first inkling of the future course of the BJP. The party had secured the maximum seats – 174 out of 425 seats – but was short of the majority mark

Company secretaries are gatekeepers of corporate governance: SEBI Chairman

“Company Secretaries, once known as secretaries to the board and management, have transformed themselves into key managerial and governance professionals. Today they are recognised for their importance on corporate landscape and have become gatekeepers of corporate governance,” said Ajay Tyagi,

Will there be light at the end of the tunnel?

Any good news which promises to bring about qualitative improvement in the lives of people, especially in rural India, is always welcome. It was heartening indeed to learn that every single village in the country now has access to electricity, as announced by the prime minister on April 29. This is most ce

A dry run in Bundelkhand

The paved road, the few concrete houses and men on motorcycles – these are deceptive signs of development in Madralalpur village. Only a couple of weeks ago, Babu, a 47-year-old distressed farmer, had hanged himself from a babool tree. Villagers were gathered at his house as his wife, mother, sister-

Our jobs, their jobs

Statistics has come a long way from the time when British prime minister Benjamin Disraeli observed: “There are three kinds of lies: lies, damned lies, and statistics.” Statistics is now an accredited branch of applied mathematics; statistical methods are routinely used to prove or disprove the

Why hasty ordinance on rape of minors needs gender balance

Of all offences, it’s the crime of rape that fires public sentiment the most, eliciting an outrage that exceeds the seemingly worst felony of all – murder too. It has probably more to do with the offence and associated gory details staying, even being replayed ruthlessly, in memory with continu

Current Issue

Current Issue

Video

CM Nitish’s convoy attacked in Buxar

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter