Shipping Corporation, BEML, BPCL among CPSEs to be disinvested next fiscal; 3 IPOs lined up

Narendra Modi Government is likely to divest its stake in state-run Shipping Corporation of India Limited, BEML Limited and Bharat Petroleum Corporation Limited (BPCL) in the next financial year, a PTI report said quoting a government official. 

This will be along with three Initial Public Offerings (IPO) including that of ECGC erstwhile Export Credit Guarantee Corporation of India Ltd.

India has kept its disinvestment targets at Rs 65,000 crores for FY 2022-23 and the target was spelt out in the Union Budget 2022 announced on 1 February. Compared with the estimated Rs 1.75 lakh crore budgeted for 2021-22, this is a significant reduction. In the revised estimates, the target for 2021-22 has been lowered to Rs 78,000 crore.

Tuhin Kanta Pandey, secretary of DIPAM, said the next year's target would be met by a mix of minority stake sales in CPSEs, the listing of CPSEs and strategic sales, this report said.

"We have got multiple financial bids for Pawan Hans, we have to go further on that process. Shipping Corp, BEML and BPCL are in the financial bids stage. HLL Lifecare and PDIL are in the EoI stage. Besides, next fiscal we will go for the listing of ECGC, WAPCOS and National Seeds Corporation and some minority stake sale, but there we might have less bandwidth," Pandey told PTI.

Asked if Pawan Hans sale would conclude by March-end, he said, "we have to see if we can manage. We are yet to open the bids and then some time would be required for getting approvals".

The Secretary said the process of demerger of core and non-core assets of Shipping Corporation and BEML is going on, post which financial bids would be invited for their strategic sale.

Asked where the BPCL privatisation process stands, he said "We are stuck with the bidders and are trying to fast-track it so that they are ready for bidding."

The government is selling 52.98 per cent of BPCL, 63.75 per cent of SCI, 26 per cent of BEML, and 51 per cent of Pawan Hans. ONGC is also selling its 49 per cent stake in the company.

Elaborating on disinvestment targets and the road ahead, Pandey said strategic sale is an ongoing process and takes about 1-1.5 years for the entire process to come to conclusion.

"That is the reason for rationalising the target because there are no easy pickings. We only sell the equity value, that's the government receipt as debt goes (to buyers) along with the company. When we say disinvestment target, it is an accounting term, it is not the real term".

The government last month concluded the sale of Air India for Rs 18,000 crore. The deal included Rs 15,300 crore of AI debt takeover by Air India and Rs 2,700 crore cash payment to the government.

"We are into a difficult area, and it is much more important for us that the certain number of transactions they get carried out. We don't want the market cap of our PSUs to artificially go down just because we are wanting to plug our budget numbers," Pandey said.

LIC, the country's largest insurer, is expected to announce its initial public offering (IPO) in March of the current fiscal year. Sebi is likely to receive the draft papers for the public offering next week.

(With inputs from PTI)