Demerged CPSE companies can use parent's name for five years

The demerged entities of central public sector enterprises will be able to use the name of the parent for at least five years from the date of demerger.

The government, in an internal circular to ministries and departments, has said that the demerged entities can use the parent's name when they participate in public procurement contracts. The decision comes after many such demerged companies could not qualify for the public procurement process.

"Procuring entities may in suitable cases consider the credentials based on the merit and circumstances of the cases like type of procurement, nature of demerger, number of eligible bidders available, etc.," said the circular, which ET has seen.


The bid documents must clearly mention the conditions under which demerged entities may become eligible, it added. It is mandatory for central ministries or enterprises to procure a minimum 25% out of their total annual procurement from micro and small enterprises (MSEs).

According to official data, procurement by CPSEs through the GeM (government e-marketplace) portal totalled ₹92,926 crore this fiscal year till end-September, compared with ₹36,233 crore a year earlier.