Govt may exit ITDC, sources say; stock zooms 15%
Sources privy of this development tell CNBC-AWAAZ that the government might announce its exit from ITDC in the next 4-5 weeks and has listed 3 ways in which it may do so.
The government is in top gear with its divestment drive since the beginning of FY18 and after shedding 10 percent stake in NALCO it might completely exit from India Tourism Development Corporation (ITDC).
Sources privy to this development told CNBC-Awaaz that the government may announce its exit from ITDC in the next 4-5 weeks and has listed 3 ways in which it may do so.
1) It could give states right to sell or give ITDC hotels in states on lease, 2) for centre-owned ITDC hotels, government may give them to private companies on lease, 3) for joint ownership of centre and state, such hotels may be given to private companies on lease.
Valuation and financial transaction discussions are in final stages, sources said.
The source further added that Madhya Pradesh and Assam state governments have agreed to sell their stake in Ashok Hotel while the centre may put up hotels in Jaipur, Mysore, Patna and Bhubaneswar on lease.
The central government owns 87 percent stake in ITDC. A complete exit could help it garner Rs 4400 crore, as per yesterday's closing price.
The government had set out with an ambitious divestment target of Rs 72,500 crore for FY18. The target is to be achieved via minority stake sale totalling Rs 46,500 crore, strategic stake sales worth nearly Rs 15,000 crore, and listing of various insurance companies to add Rs 11,000.
Kicking off the divestment process for the current financial year, the government has already cleared the sale of stakes in multiple state-owned companies. It will be offloading 10 percent stake each in PFC, SAIL, NTPC & NHPC, 5 percent in REC, 15 percent in NLC India, and 3 percent in IOC via offer for sale.
After the newsbreak, the stock saw a sharp 15 jump to levels of Rs 618 per share.Watch video for more.