The government has garnered Rs 19,499 crore through CPSE disinvestment and share buyback so far in 2020-21, as against the Rs 2.10 lakh crore budget target set for the entire fiscal year ending March 31.
With COVID-19 related delays impacting big ticket strategic sales and listing of insurance behemoth LIC, the government is likely to miss the budgeted disinvestment target by a wide margin in this financial year.
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Finance Minister Nirmala Sitharaman had in her budget for 2020-21 set a target of raising Rs 2.1 lakh crore from privatisation, sale of minority stakes in state-owned companies and share buyback by CPSEs. While Rs 1.20 lakh crore was to come from stake sale in CPSEs, Rs 90,000 crore was to be mopped up from share sale in financial institutions.
As many as 4 CPSEs Hindustan Aeronautics Ltd (HAL), Bharat Dynamics, IRCTC and SAIL have come out with offer-for-sale (OFS) this fiscal year. This fetched Rs 12,907 crore to the exchequer. Besides, initial public offering (IPO) by IRFC and Mazagon Dock Shipbuilders together fetched Rs 1,984 crore.
Moreover, selling of government stake in private companies held through SUUTI and other transactions garnered about Rs 1,837 crore. So far in current fiscal year, 4 state-owned companies — RITES, NTPC, KIOCL, NMDC– have completed share buyback which got Rs 2,769 crore to the exchequer. A buyback, also known as a share repurchase, is when a company buys its own outstanding shares to reduce the number of shares available in the open market.
The government is also looking to sell its entire 26.12 per cent stake in Tata Communications Ltd (TCL), erstwhile VSNL, through OFS and strategic sale route in the current fiscal. The process of privatisation of Air India, BPCL, Pawan Hans, BEML, Shipping Corp, Neelachal Ispat Nigam Ltd, and Ferro Scrap Nigam Ltd (FSNL) is underway.