Fast-track divestment: SUUTI stake-sale among top options

With a target of mopping up ₹72,500 crore from disinvestment this fiscal, the Government will use all options, including unloading stakes held by SUUTI, and not just sale of shares in public sector units.

“SUUTI is always an option and will be used this fiscal as well. The disinvestment target will be met using all available methods, including public offers, strategic sales and share buybacks by public sector units,” said an official, adding that efforts are afoot to ensure that disinvestment happes through all channels and at the earliest.

SUUTI, or the Specified Undertaking of the Unit Trust of India, was set up in 2003 after the restructuring of the erstwhile UTI.

It holds stake in 51 companies, including listed blue-chip firms such as Reliance Industries, Axis Bank, and ITC as well as eight unlisted entities, including NSDL, STCI Finance, Over The Counter Exchange, and Stock Holding Corporation of India.

The combined value of the shares SUUTI holds is well over ₹50,000 crore and the Centre has already appointed a panel of six merchant bankers for a three-year period starting 2016 to manage sale of SUUTI holdings.

The Department of Investment and Public Asset Management (DIPAM) had raised ₹10,778.71 crore selling small SUUTI holdings, including in ITC and L&T.

The official said that “in 2016-17, we managed to raise over ₹46,000 crore. This year, the target is higher and we are working out on all options to ensure that there is no lean period in disinvestment.”

While the Cabinet Committee on Economic Affairs has approved listing of 11 State-run firms, DIPAM is also preparing for follow-on offers in seven PSUs.

It has invited bids from legal advisers for selling stake in NHPC, NTPC, Power Finance Corporation, Rural Electrification Corporation, Steel Authority of India, NLC and Indian Oil Corporation, that could fetch over ₹34,000 crore.

DIPAM is also fast-tracking plans for the possible listing of General Insurance Corporation (GIC) of India and New India Assurance Company (NIA) in the first half of the fiscal. The three other general insurers — United India Insurance, Oriental Insurance and National Insurance — are likely to be listed in the second half.

The Centre expects ₹11,000 crore from the initial public offers of the insurers.

Efforts are also on to exit most hotels and subsidiaries of ITDC Ltd, except Samrat and Ashok Hotels in Delhi.

ITDC has now sought approval from shareholders for setting up joint ventures for four units and selling five subsidiaries.

Simultaneously, DIPAM and the Department of Public Enterprises are looking at PSUs that are eligible for share buyback. “Capital restructuring norms for PSUs were issued last year and all firms with idle funds will be expected to do so,” said another official.

State-run Engineers India Ltd and Oil India have already announced buy-back of shares for this fiscal.

COMMENT NOW