DIPAM tells CPSEs to follow capital restructuring norms

NEW DELHI: The Department of Investment and Public Asset Management (DIPAM) has asked state run firms to follow guidelines on capital restructuring and expedite exemption proposals.

"This is to get higher returns from government investment," said DIPAM secretary, Neeraj Kumar Gupta in a tweet.

Last year, the government had issued fresh guidelines on capital restructuring that stated that every CPSE would pay a minimum annual dividend of 30 per cent of profit after tax or 5 per cent of net worth, whichever is higher. CPSE having net worth of at least Rs 2,000 crore and cash and bank balance of above Rs 1,000 crore were to go for buybacks.

A senior government official said the government will continue to push for share buybacks and cashrich central public sector enterprises are expected to lead this drive to ensure the Rs 72,500 crore target is met. The government has already identified seven state run firms which include blue chip companies such as NTPC Ltd, PFC and Sail, for stake sales.

The government will divest 10 per cent stake in NHPC Ltd, NTPC Ltd, NHPC, SAIL and PFC, 5 per cent in REC, and 3 per cent in IOCL. Of the total target, Rs 46,500 crore would be raised through disinvestment of minority stake.

Earlier, DIPAM had issued the mechanism for listing of staterun firms. The government will look to list all its companies that have positive net worth, no accumulated losses and have earned net profit consecutively in three preceding years.