COVID impact | Government divestment in 2020 falls 37%: Report

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The COVID-19 pandemic has hurt the Centre's efforts to raise funds this year through major stake sales and initial public offerings (IPOs).

The government has raised Rs 42,871.94 crore so far in 2020, 37 percent lower than the Rs 68,176.57 crore raised in 2019, Mint reported citing information from Prime Database.

The government's plan to privatise state-run firms such as Air India, Bharat Petroleum Corporation (BPCL) and the Shipping Corporation of India has been delayed due to the pandemic and related restrictions.

Also read: Divestment plan back on track; BEML, ITDC next on agenda

A significant portion (39 percent) of the divestment in 2020 was done through exchange-traded funds (ETFs), the report said. The next mode of divestment was central public sector enterprises (CPSEs) sale at Rs 13,883 crore (32 percent), public offerings at Rs 10,988 crore (26 percent), buybacks at Rs 844 crore and remittances from Specified Undertaking of The Unit Trust of India at Rs 600 crore (1 percent).

Domestic companies raised massive amounts of capital in 2020, despite the COVID-19 outbreak. Fundraising through public equity markets touched a record Rs 1.7 lakh crore in 2020, exceeding the previous high of Rs 1.6 lakh crore in 2017, according to Prime Database.

The amount corporate India raised this year is more than double the amount it raised in 2019 (Rs 82,241 crore) and in 2018 (Rs 62,651 crore), the report added.

"Strong retail participation in initial public offerings (IPOs), huge listing gains and highest-ever amount raised through qualified institutional placements (QIPs) and infrastructure investment trust (InvITs)/ real estate investment trusts (ReITs) were the key highlights of the year," said Pranav Haldea, managing director, Prime Database Group, as quoted by Mint.