Over the next year, the government will review nearly 100 profit-making public-sector units that are currently unlisted, and identify medium- and large-size firms that can be gradually listed.
“We will examine profit-making public-sector units in terms of valuation and size, and worthy firms may be advised to go for listing,” said Neeraj Kumar Gupta, Secretary, Department of Investment and Public Asset Management (DIPAM).
Of the 165 profit-making PSUs, just over 40 are listed. While some may be too small in size to be listed, the government will identify medium- and large-size ones with a good track record, for listing.
Saying that the listing of PSUs will increase their public accountability and unlock the true value of these companies, Finance Minister Arun Jaitley had in the Budget announced a revised mechanism and procedure to ensure time-bound listing of identified Central Public Sector Enterprises (CPSEs) on stock exchanges.
DIPAM will look at quickening the process for the preparation of documents and regulatory clearances required for the listing. “The timing of the actual transaction depends on market conditions, which is out of our control,” an official said.
The move will also benefit the proposed listing of the five general insurance companies as well as railways PSUs — IRFC, IRCON and IRCTC — next fiscal.
Sources pointed out that due to various delays, just six PSUs — including SJVN Ltd, Coal India Ltd and MOIL — have been listed since 2009. In 2012, it was decided to list another four PSUs, of which two will be listed this fiscal.
As a prelude to their stock market debuts, companies and administrative ministries will have to ensure the time-bound preparation of the information memorandum and data centre.
“Listing will give them access to capital market, which can be leveraged for raising funds and expanding their economic activity. It will also bring in professional management and better compliance,” Gupta told BusinessLine.
For 2017-18, the Budget has pegged the proceeds from disinvestment at ₹72,500 crore. Of this, ₹46,500 crore is estimated from minority stake sales in PSUs and ₹15,000 crore from strategic disinvestment. The government has also budgeted ₹11,000 crore from the listing of the five general insurers.
The DIPAM Secretary also said the process of strategic sales in public-sector units is on and preparations such as tenders for transaction and legal advisers are being carried out.