IPOs of PSUs to be speeded up

Of the 157 profitable PSUs, 112 are yet to be listed on stock exchanges

GN Bureau | December 20, 2016


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The cabinet secretariat is likely to issue a directive to the ministries concerned shortly to explain the slackness as well as steps being taken to bring initial public offerings (IPOs) of unlisted firms, reported Financial Express.

Of the 157 profitable PSUs, 112 are yet to be listed on stock exchanges, according to the latest public enterprises survey.

The last PSU IPO was in March 2012 when the government sold a 10 percent stake in National Buildings Construction Corporation for Rs 125 crore.

“Even though the amount to be collected through the IPOs might not be huge as most of the big PSUs have already been listed, the listings should be a continuous process for greater purposes like improving corporate governance, increasing retail investor base, etc.,” an official was quoted as saying.

Officials blame choppy markets, lengthy processes and negligence on the part of the officials for the delays in listing of PSUs. If plans go right, the next IPO is likely to be that of Cochin Shipyard, through which government will sell a 10 percent stake to raise about Rs 350 crore in February-March 2017.

According to a cabinet decision in November 2009, unlisted PSUs with no accumulated losses and having earned net profit in three preceding consecutive years should be listed. “The administrative ministries should have been doing this all this time. But, there seems to be a lethargy,” another official said.

The cabinet secretariat or the department of investment and public asset management (DIPAM) might write to the administrative ministries to prepare an action taken report with details such as how many PSUs under them are unlisted, when will they be listed, etc., he said.
 

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