Cabinet approves listing of 11 PSUs -Governance Now

Cabinet approves listing of 11 PSUs

Listing of these PSUs will be through public offer of shares up to 25 percent of union government’s shareholding

GN Bureau | April 17, 2017

#listing PSUs #cabinet #CPSEs

The cabinet committee on economic affairs has approved the proposal of listing of 11 central public sector enterprises on stock exchanges.

The public sector undertakings include Rail Vikas Nigam Limited (RVNL), IRCON International Limited, Indian Railway Finance Corporation (IRFC) Ltd, Indian Railway Catering and Tourism Corporation (IRCTC) Ltd, RITES, Bharat Dynamics Limited (BDL), Garden Reach Shipbuilders & Engineers (GRSE) Ltd, Mazagon Dock Shipbuilders Limited (MDSL), North Eastern Electric Power Corporation (NEEPCO) Ltd, MSTC Ltd and Mishra Dhatu Nigam Ltd (MIDHANI).

The listing of these CPSEs will be through public offer of shares up to 25 percent of union government’s shareholding that may include offer of fresh shares for raising resources from the market. However, actual disinvestment in respect of each CPSE along with the mode of raising resources has been delegated for decision on a case to case basis to the alternative mechanism, headed by the finance minister.

The CCEA has also approved reservation of shares for the eligible employees of 11 CPSEs in accordance with the extant provisions of SEBI Regulations.

To encourage small investors in the CPSEs’ disinvestment program, a price discount upto 5 per cent on the issue price has also been approved for the retail investors and eligible employees of these PSUs.

From the economic and sectoral perspective, the decision to list 11 CPSEs on stock exchanges through public offer will have multiple advantages for to the stakeholders like post-listing; value of a CPSE has the potential to be unlocked in multiples of book value of its equity with respective increase in their market capitalisation.

Listing of CPSEs will also promote ‘people’s ownership’ by encouraging public participation in CPSEs.

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