DIPAM Secretary: Prioritize finishing up ongoing strategic sales in FY2025

DIPAM Secretary: Prioritize finishing up ongoing strategic sales in FY2025

A senior official said that the Department of Investment and Public Asset Management (DIPAM) would not take on any new CPSEs for a strategic sale in the next fiscal year in favor of finishing off current privatization operations like IDBI Bank and BEML. As.

A senior official said that the Department of Investment and Public Asset Management (DIPAM) would not take on any new CPSEs for a strategic sale in the next fiscal year, instead concentrating on finishing off current privatization operations like IDBI Bank and BEML. As.

According to a senior official, the Department of Investment therefore Public Asset Management (DIPAM) would prioritize concluding the existing privatization deals, such as IDBI Bank and BEML, and won't be considering any new CPSEs for strategic sale in the next fiscal year.

DIPAM Secretary Tuhin Kanta Pandey told PTI in an interview that although there isn't a particular business on the list of initial public offerings (IPOs) for the next fiscal year, there would be offers for shares from subsidiaries of listed CPSEs.

According to Pandey, in the previous three years, the aggregate market capitalization of banks, insurance firms, and central public sector enterprises (CPSEs) has increased by 500%, from Rs 15 lakh crore to Rs 58 lakh crore.

In January 2021, the Government of India's equity stake grew four times, from Rs 9.5 lakh crore to Rs 38 lakh crore.

"There has been huge The creation of value in public sector companies, driven by strong performance in conjunction with a positive Indian economy, growth prospects, capital restructuring, sustained dividend policy as well as a calibrated disinvestment strategy," Pandey said.

Initial expressions of interest (EOI) from possible bidders for the privatization of CPSEs have been received by DIPAM, which oversees government equity in public sector enterprises.

According to Pandey, the enterprises that have received interest from early bidders and submitted EOIs would be handled within the next fiscal year.

Right now, we are not thinking about anything else. We would like to work further on it in an efficient manner. Work from home and complete those transactions. We are concentrating on the conclusion, which we originally thought would be completed in this fiscal year, but for some reason there has been some interruption that is irrelevant to us," Pandey stated.

In addition to IDBI Bank, strategic sales of a number of CPSEs, including as NMDC Steel, Shipping Corporation, BEML, and HLL Lifecare, are in the works and were intended to be completed during the current fiscal year.

In reference to the government's proposal to sell an interest in Hindustan Zinc (HZL) in tranches, Pandey said that there are doubts over the management's demerger plans.

Analysts saw Vedanta, headed by Anil Agarwal, as attempting to make a dent in the massive cash pile of the former state-owned corporation when it announced plans to sell its worldwide zinc holdings to HZL earlier in the previous year. Sarkar, which is a director on the HZL board, disagreed with the decision due to valuation issues.

HZL, which is controlled by Agarwal, is now dividing the business into three distinct divisions.

"We didn't succeed there. Our initial plan was to leave in tranches and enter the market in accordance with the Supreme Court's judgment, but we subsequently encountered difficulties as a result of moves made by the promoter and management that did not align with our goal, such as related party transactions. There are now further questions about demerger. Investors won't be interested in the stock or in our share sale until these doubts are cleared out, according to Pandey, who said that the Mines Ministry is constantly monitoring all those concerns.

The government owns 29.54 percent of HZL, while promoter Vedanta Group owns 64.92 percent. Public shareholders own around five percent of the remaining equity.

The government intends to generate Rs 50,000 crore from alternative capital sources, such as revenues from asset monetization and disinvestment, in the interim budget for 2024–25.