Govt to fast-track divestment of BEML and SCI

The Centre is likely to invite expressions of interest (EoIs) for the strategic disinvestment of BEML and Shipping Corporation of India (SCI) over the next few months, as it looks to speed up the privatisation of non-strategic state-run companies. The demerger of land and non-core assets of both companies, which has held up the stake-sale plans, is expected to be completed by October.

Separately, the government is also looking to fast-track secondary market offers of others, including National Fertilizers Ltd (NFL) and Rashtriya Chemicals & Fertilizers Ltd (RCF).

"It is not only strategic divestment, the government is also looking to unlock value through stake sale in the secondary market," said an official aware of the details.


The government is evaluating all prospective candidates and a decision will be taken based on market conditions, the official said, adding that EoIs for the IDBI Bank disinvestment will also be invited soon.

The Centre expects to complete BEML's demerger next month. The company's board has fixed September 9 as the record date for determining the eligible shareholders for a 1:1 issue of shares of BEML Land Assets Ltd.

"Once the process is completed, we will come up with the EoI by November," the official said.

Disinvestment Target
The government plans to sell a 26% stake in BEML. Its share closed 1.1% down at Rs 1,185 on the BSE Monday for a market value of Rs 7,562 crore. The Centre has also hastened the process for hiving off the non-core assets of SCI. Officials said the company is expected to get the required regulatory permissions for the demerger by mid-October.

"The timeline in the case of Shipping Corporation is that by October-end the demerger process should be completed and the demerged entity will be listed by year-end," said an executive aware of developments.

The company's board has already approved a demerger scheme for hiving off the non-core assets to Shipping Corporation of India Land and Assets Ltd (SCILAL). The assets include Shipping House, Mumbai, and Maritime Training Institute (MTI), Powai. The Centre is aiming to sell its entire 63.75% stake in SCI. The share closed 1.64% down at Rs 113.9 on the BSE for a market capitalisation of Rs 5,305 crore.

The government has a disinvestment target of Rs 65,000 crore for the current fiscal year. The target may be difficult to meet as the strategic sale of BPCL has been shelved. It has raised Rs 24,544 crore through disinvestment in the current financial year thus far. The government is also looking to fast-track stake sales in fertiliser companies and will offload a 10% stake in RCF and 20% in NFL.

"Expression of interest for IDBI Bank will also happen within this year and we expect to complete the transaction in this fiscal," said the official cited earlier. The government along with Life Insurance Corporation of India is expected to sell at least a 51% stake in the lender.