The centre has projected a conservative disinvestment target of Rs 1.75 lakh crore for FY22 even although bulk of the offers planned in FY21, which includes the significant-ticket strategic sale of fuel retailer-cum-refiner BPCL and the mega initial public supply of Life Insurance Corporation are noticed materialising next fiscal.
Strategic disinvestment of Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans and Neelachal Ispat Nigam are also anticipated to be completed in FY22. Additionally, privatisation of two public sector banks and one basic insurance coverage enterprise to be taken up in FY22, the government mentioned devoid of naming them.
With Covid-19 pandemic playing spoilsport, FY21 disinvestment revenues (revised estimate) will be at a 5-year low of about Rs 32,000 crore or 15% of the enormous annual target of Rs 2.1 lakh crore.
Unveiling the a lot awaited strategic disinvestment policy, finance minister Nirmala Sitharaman mentioned 4 broad sectors are classified as strategic in which at least one PSU is to be retained though the remaining ones can be privatised or merged or closed. These sectors are: atomic power, space and defence transport and telecommunications energy, petroleum, coal and other minerals banking, insurance coverage and monetary services. In non-strategic sector, CPSEs will be privatised or closed.
The new policy will release a substantial quantity of PSUs for privatisation in the coming years, potentially boosting the Centre’s non-debt capital receipts for several social sector and developmental programmes.
As FE had reported earlier, the Niti Aayog has asked the government to retain manage more than the country’s major 4 state-run lenders — State Bank of India, Punjab National Bank, Bank of Baroda and Canara Bank, even as it advised that 3 little public-sector banks — Punjab & Sind Bank, Bank of Maharashtra and Uco Bank — be privatised on a priority basis.
Sitharaman also announced that an incentive package is getting worked out for states to incentivise disinvestment of their PSUs.
She also proposed to use a Special Purpose Vehicle in the type of a enterprise to carry out monetisation of idle land with central government departments and PSUs, either by way of direct sale or concession or by related suggests.
The government’s program to sell 52.98% stake in BPCL, which was worth about Rs 60,000 crore in November 2019, about the time the stake sale proposal, was authorized by the Union Cabinet. At the existing marketplace costs, the stake is worth about Rs 45,150 crore only. However, the actual receipts will rely on valuation and consideration of a premium.
The IPO of LIC was the second largest element of the budgeted disinvestment target for this fiscal.
While the valuation of the insurer – which generally plays White Knight to the government – will be identified closer to the listing, it is believed to be worth Rs 8-11.5 lakh crore, which means a 10% IPO could fetch the government Rs 80,000-110,000 crore.
After EoI stage, Air India privatisation will enter monetary bids stage in March-April and the officials are optimistic of the deal going via in FY22. The bids for AI are most likely to be below Rs 20,000 crore. The Centre could get about Rs 3,000 crore money.