The Ministry of Finance is betting on mergers and acquisitions between CPSE and share buybacks by state-owned companies to achieve the disinvestment target of Rs 80,000 crores for the fiscal year In progress. The government raised more than Rs. 9,600 crores through IPOs of three CPSE and a slice of the Bharat-22 ETF during the first six months of the fiscal year until the end of the fiscal year. ;now.
An official at the Ministry of Finance said that there were liquidity constraints in the market for 3 or 4 months and that these conditions persisted until uncertainties prevailed in the world markets and that gross remain volatile. "We will reach the disinvestment goal. We are considering acquiring Crown corporations with similar CPSEs, such as PFC and REC, "said the manager.
To launch the merger and acquisition process, the Department of Investment and Public Assets Management (DIPAM) will soon be issuing a call for tenders from merchant bankers and law firms. Lawyers to manage consolidation, starting with two of these transactions. The government plans to sell its 65.61% stake in the state-owned Power Finance Corporation (PFC) to the Rural Electrification Corporation (REC), which could bring about 14,000 rupees to the Treasury.
In addition, the Ministry of Finance has also shortlisted a dozen central public sector companies, including Coal India, NTPC, Nalco and NMDC, for a potential share buyback during the year. Exercise in progress. The list also includes BHEL, NHPC, NBCC, SJVN, KIOCL and Hindustan Aeronautics. These CPSEs were invited to repurchase shares in accordance with the DIPAM Capital Recap Guidelines dated May 27, 2016.
The guidelines require CPSEs with a net worth of at least Rs. 2,000 crore and a cash balance and a bank balance in excess of Rs. 1,000 crore must redeem shares.
The boards of directors of three CPSE – NALCO, NLC and the Cochin Shipyard – have already approved share buybacks with a total value of 2,000 crore. "A dozen companies will buy back shares. Given the current market situation, we are no longer considering an IPO or OFS, "said the manager.