Govt looking to step up disinvestment process

After launching the IDBI Bank privatisation process, the government aims to get on with the rest of its disinvestment programme, lining up strategic asset disposals, offers for sale and new listings. The privatisation pipeline includes Container Corp. of India (Concor) and several subsidiaries of Air India that the government still owns.

"There will be.. more EoIs (expressions of interest) which might follow. For example, Concor might come by November or December," the Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey told ET in an interview.

Extra Care with Due Diligence

"We might have EoIs for some of the subsidies of Air India, like AIESL and AIASL. So possibly, Alliance Air."

Asked how confident the department was about meeting the ₹65,000 crore FY23 asset-sale target, he said it would be unfair to treat divestment purely from the point of view of fiscal numbers.

"Over a period of time now, I think there is no potential for very large receipts from disinvestment. But there are plenty of opportunities for investment growth and jobs," Pandey said, underlining the reworked focus.

Air India Engineering Services Ltd (AIESL), Air India Airport Service Ltd (AIASL) and Alliance Air are still state-owned though Air India has been sold to the Tata Group.

The Centre is also planning to list Indian Renewable Energy Development Agency Ltd (IREDA) and Wapcos Ltd, an engineering consultancy and construction company under the jal shakti ministry.

"The draft red herring prospectus in case of Wapcos has already been filed," Pandey said, adding that the government is also eyeing the listing of IREDA and ECGC (Export Credit Guarantee Corp. of India Ltd). The Shipping Corporation of India (SCI) demerger is at an advanced stage and its disinvestment will be taken up after the process is completed. The government will soon invite EoIs for mining company NMDC, he added. HLL Lifecare and Projects & Development India Ltd (PDIL) are at an advanced stage of due diligence.

IDBI, HZL STAKE SALE

The Centre expects the IDBI divestment to spill over into the next fiscal year, as the process includes a 'fit and proper' check and security clearance for bidders.

"If you say that the share transfer, that looks to me a little difficult (this fiscal year) because we will have an expression of interest by December and then you have proper due diligence of financial bidding," Pandey said. "We would like it to be over before March. But then there would be regulatory issues to be settled and closed."

The department is taking extra care with due diligence in terms of disclosures and also checks about prospective investors through the transactional advisor, after being forced to abort the Central Electronics Ltd (CEL) privatisation due to issues with the successful bidder.

"We will take steps as much as possible in terms of disclosures, as well as checking about them through our transactional advisor," Pandey said. "Here there is an additional check again on behalf of RBI."

Of the ₹65,000 crore disinvestment target for the current fiscal year, the government has so far raised ₹24,544 crore.

The Centre is counting on the sale of its residual Hindustan Zinc (HZL) stake, which is worth nearly ₹36,000 crore at current prices, to meet the target. Pandey said the government is yet to take a call on whether the sale will be in parts and how much stake will be offloaded through these tranches.

The Centre is moving away from a topline approach of fixing a number and then working for it. It is now looking at maximising the valuation and efficiency of the company rather than just receiving an amount, Pandey said.

The government has received disinvestment receipts of about Rs 4 lakh crore to date since 2014. Going forward, the bandwidth will come down, he added.

Citing the example of Neelachal Ispat Nigam Ltd (NINL), Pandey said that while the Centre did not get anything from the divestment, the company received a capital infusion, its financial debt was paid and jobs were saved. The divestment helped in unlocking the potential of the company, which otherwise would have landed in the National Company Law Tribunal (NCLT), the bankruptcy court.