The Hindu Business Line : Gujarat Govt may divest 40% holding in GACL

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Dahej (Gujarat) Jan. 26 The Gujarat Government is likely to divest this year its entire 40 per cent holding in State-owned Gujarat Alkalies and Chemicals Ltd (GACL), whose turnover is expected to cross Rs 1,200 crore this year. The Government is also considering to reduce its stake in another turnaround company, Gujarat Mineral Development Corporation (GMDC).

The State Government had given an in-principle green signal for outright sale of its 40 per cent stake in GACL last year and appointed a committee to study various modalities. The committee had appointed Kotak Mahindra Capital to study the issue and restructure the corporation.

The GACL Managing Director, Mr Guru Prasad Mohapatra, told Business Line here that while the PSUs of the State Government own 40 per cent stake in the Corporation, 26 per cent was held by public and the rest by different financial institutions, including LIC. GACL was listed on the BSE nearly 25 years ago.

Official sources in Gandhinagar also informed that the State Government is considering to reduce its 74 per cent holding in Gujarat Mineral Development Corporation (GMDC) to 51 per cent through a follow-on public issue.

These two, both major PSUs in Gujarat, were the only two State-owned listed PSUs whose divestment was being considered. Besides, the State Government, which has refrained from appointing politicians to head its boards and corporations and succeeded in turning around some of them, is also considering major restructuring in other major PSUs through the merger route. For instance, Gujarat State Fertilizers & Chemicals (GSFC) and Gujarat Narmada Valley Fertilizers Company (GNFC) may be merged in a year or two.

Seven PSUs jointly own 40 per cent stake in GACL, with Gujarat State Investment Ltd (GSIL) having the largest stake (17 per cent), followed by Gujarat Industrial Investments Corporation (GIIC) with a 9.69 per cent holding. Three listed state PSUs, viz GMDC, GSFC and GIPCL have a 4.45 per cent, 1.41 per cent and 1.50 per cent stake, respectively, in the GACL while Gujarat Industrial Development Corporation (GIDC) and Gujarat Maritime Board (GMB) each have a 2.56 per cent stake in the Dahej and Vadodara-based company.

Among the potential suitors reported to be interested to buy the State Government's 40 per cent holding in GACL are the Reliance Group's Indian Petrochemicals Corporation (IPCL), the Aditya Birla group and Tata Chemicals.

More Stories on : Disinvestment | Chemicals | Gujarat

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