Tuesday, January 01, 2019

Government Garners Rs 77,417 Crore From Stake Sale In State-Run Firms In 2018

The government raised a record Rs 77,417 crore from stake sale in public sector units in 2018, and the disinvestment programme is headed for another blockbuster year in 2019 with the planned privatisation of national carrier Air India.

The Bharatiya Janata Party-led National Democratic Alliance, which in its previous stint privatised the most number of public sector undertakings ever, continues to shy away from the outright sale of bluechip state-run firms to the private sector in the present regime and is instead pursuing a new-found strategy of merging companies to meet its revenue targets.

While big-ticket disinvestments, including Oil and Natural Gas Corporation Ltd.'s acquisition of Hindustan Petroleum Company Ltd., Central Public Sector Enterprise Exchange Traded Fund, Bharat-22 ETF, and Coal India Ltd. stake sale, along with six initial public offerings brought Rs 77,417 crore to the government coffers last year, the year was marred by a botched attempt of the government to sell 74 percent stake in Air India.

The government has now firmed up a fresh plan for the sale of the airline. As part of the plan, it will sell subsidiaries, like Air India Air Transport Service Ltd., Air India Engineering Services Ltd., and land and building assets of Air India separately to help trim Rs 29,000 crore debt burden of the national carrier.

Alongside, the government will continue to infuse funds into the airline to keep it viable, and finally sell it after extensive deliberations with potential investors to ensure that the airline gets the best valuation.

The subsidiaries and assets alone are expected to fetch the government close to Rs 9,000 crore.

The first off the blocks in strategic sale plan for 2019 will be Pawan Hans where the government holds 51 percent, while oil major ONGC holds the remaining stake. The sale of helicopter service provider Pawan Hans is expected to be completed by March.
01/01/19 PTI/Bloomberg Quint

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