Difficult to estimate quantum of disinvestment proceeds in FY24: FinMin

Department of Investment and Public Asset Management (DIPAM) has realised about Rs 10,050 crore through disinvestment transactions as on December 13, 2023.

The Finance Ministry has said that it is difficult to estimate what will be the actual proceeds from disinvestment in the current fiscal as much depends on market conditions and investor interest.

The Budget Estimate for disinvestment receipts in 2023-24 has been kept at Rs 51,000 crore. Department of Investment and Public Asset Management (DIPAM) has realised about Rs 10,050 crore through disinvestment transactions as on December 13, 2023.

“Disinvestment is an ongoing process, and execution of disinvestment transactions depends upon administrative feasibility, market conditions, domestic and global economic outlook, and investor interest. In view of this, it is difficult to anticipate the quantum of actual proceeds from disinvestment during the current fiscal,” minister of state for finance Bhagwat Kishanrao Karad told Lok Sabha in a written reply on December 18.

Government policy on disinvestment is implemented through the strategic disinvestment, wherin the entire or substantial sale of the government shareholding in CPSEs along with transfer of management control takes place, and minority stake sale.

In PSEs, where the government continues to retain control, disinvestment through minority stake sale is carried out through various SEBI-approved methods such as Initial Public Offer (IPO), Offer for Sale (OFS), buyback of shares etc. from time to time based on prevailing market conditions and investor interest.

The government, since 2016, has given in-principle approval for strategic disinvestment of 36 cases of public sector enterprises (PSEs). Out of the 33 transactions being handled by DIPAM, strategic disinvestment has been completed in 10 cases including Air India and Neelachal Ispat Nigam Limited (NINL).

Among the ongoing transactions for strategic disinvestment include BEML Limited, Shipping Corporation of India, HLL Lifecare, IDBI Bank, Container Corporation of India Limited, Rashtriya Ispat Nigam Limited, NMDC Steel.

For Bharat Petroleum Corporation Ltd and Bhadrawati Steel Plant, which is a unit of Steel Authority of India Limited (SAIL), the expression of interest (EoI) process was called off due to lack of sufficient bidder’s interest to proceed. For Pawan Hans Limited and Central Electronics Limited (CEL) the successful bidder was disqualified and the transaction terminated. In the case of Alloy Steel Plant, Durgapur (unit of SAIL) the transaction stands halted for the time being.

Some of the transactions, including  Scooters India Limited, were halted by DIPAM as the PSEs were recommended for closure.

The strategic disinvestment of Engineering Projects India Limited and Bridge & Roof Company (India) Limited are not feasible, he said.
The strategic sale of various units of India Tourism Development Corporation Limited is being processed by the administrative ministry.