Cabinet approves sale of govt's entire 73.47% stake in Dredging Corp

The Cabinet has approved the sale of the government’s entire 73.47 percent stake in Dredging Corporation of India, official sources said after the Cabinet meeting, chaired by Prime Minister Narendra Modi.

They said the Cabinet has approved the sale of government's entire 73.47 per cent stake in the company which could fetch about Rs 1,400 crore to the exchequer.

The dredging company is under the administrative control of the shipping ministry.

It is involved in maintenance dredging, capital dredging, beach nourishment, land reclamation, shallow water dredging, project management consultancy and marine construction.

A core group of secretaries on disinvestment, headed by the Cabinet Secretary, had already approved the sale of DCI.

The government think tank Niti Aayog too had favoured disinvestment.

Niti Aayog had recommended that the government should get out of this company. It also suggested that government should get out and sell its stakes completely in other non-listed entities like Karnataka Antibiotics.

In the past, Cabinet approvals have been given for strategic trade off and now what has to be seen is the mechanism government will use to offload its entire stake in this company.

The DCI stock was trading 20 per cent up at Rs 669.95 on BSE in the afternoon.

At 13:40 hours IST, there were pending buy orders of 1,23,364 shares, with no sellers available on the BSE. The share price of the state-run company has shot up 74 percent in current calendar year.

The stake sale in Dredging Corporation could be a part of government's divestment programme for the financial year and also could help the government meet its fiscal deficit target of 3.2 percent of GDP for the year 2017-18.

The government targets to raise Rs 72,500 crore through disinvestment during the year.