New Delhi: The government's plan to conduct its first strategic sale of state-run Air India found no takers at the close of bidding on Thursday, forcing the Centre to think of selling other assets, including SUUTI stakes held in ITC and Axis Bank.
The blank draw for the big ticket divestment puts pressure on the government to consider other ways of meeting its steep target of raising Rs 80,000 crore from divestment in state-run companies.
Economic affairs secretary Subhash Garg said his ministry would be looking at options other than the Air India divestment.
Other officials said they would be looking closely at a Niti Aayog recommendation to sell SUUTI stakes in top corporate houses such as ITC, Larsen & Tourbo and Axis, valued at Rs 50,000 crore. The finance ministry has long debated offloading part of this treasure held by SUUTI through a new exchange traded fund for PSUs.
SUUTI, which was created in 2003 by splitting Unit Trust of India into two distinct entities - the Specified Undertaking of the Unit Trust of India (SUUTI) and UTI Mutual Fund - holds 11.27 per cent in ITC, 8.18 per cent in L&T and 11.66 per cent in Axis Bank.
The reason why the government considered the sale through an ETF was because that would disperse the holding in these blue-chip firms, making it tough for any one single investor to corner shares and try a takeover bid of these firms. Both L&T and ITC are believed to be particularly prickly on this score.
However, the Niti Aayog is also sending a new list of 11 more PSUs that it has identified for divestment to cabinet for approval. This includes firms such as Hindustan Copper, National Textile Corporation, Telecommunications India and Mecon. The Niti Aayog had already recommended 40 sick PSUs for strategic divestment.
India's offer to sell a stake in Air India failed to draw a single bid by the Thursday deadline, underlining the challenges it faces in fixing the debt-laden state carrier and meeting a broader target of stake sales in government-held firms.
"As informed by the transaction adviser, no response has been received for the expression of interest floated for the strategic divestment of Air India," the ministry said in its tweet in the evening. "Further course of action will be decided appropriately," it said.
01/05/18 Jayanta Roy Chowdhury/Telegraph
To Read the News in full at Source, Click the Headline
The blank draw for the big ticket divestment puts pressure on the government to consider other ways of meeting its steep target of raising Rs 80,000 crore from divestment in state-run companies.
Economic affairs secretary Subhash Garg said his ministry would be looking at options other than the Air India divestment.
Other officials said they would be looking closely at a Niti Aayog recommendation to sell SUUTI stakes in top corporate houses such as ITC, Larsen & Tourbo and Axis, valued at Rs 50,000 crore. The finance ministry has long debated offloading part of this treasure held by SUUTI through a new exchange traded fund for PSUs.
SUUTI, which was created in 2003 by splitting Unit Trust of India into two distinct entities - the Specified Undertaking of the Unit Trust of India (SUUTI) and UTI Mutual Fund - holds 11.27 per cent in ITC, 8.18 per cent in L&T and 11.66 per cent in Axis Bank.
The reason why the government considered the sale through an ETF was because that would disperse the holding in these blue-chip firms, making it tough for any one single investor to corner shares and try a takeover bid of these firms. Both L&T and ITC are believed to be particularly prickly on this score.
However, the Niti Aayog is also sending a new list of 11 more PSUs that it has identified for divestment to cabinet for approval. This includes firms such as Hindustan Copper, National Textile Corporation, Telecommunications India and Mecon. The Niti Aayog had already recommended 40 sick PSUs for strategic divestment.
India's offer to sell a stake in Air India failed to draw a single bid by the Thursday deadline, underlining the challenges it faces in fixing the debt-laden state carrier and meeting a broader target of stake sales in government-held firms.
"As informed by the transaction adviser, no response has been received for the expression of interest floated for the strategic divestment of Air India," the ministry said in its tweet in the evening. "Further course of action will be decided appropriately," it said.
01/05/18 Jayanta Roy Chowdhury/Telegraph
0 comments:
Post a Comment