The government may not choose to go ahead with the planned disinvestment in India Tourism Development Corporation (ITDC) immediately as it wants to wait for an improvement in the public sector unit’s finances.
“At present, we have just initiated the modalities for disinvestment, but we can do it any time over the next three years. We are keeping our options open but valuations have to be right,” said a senior government official.
Sources said the government is expecting a revival in ITDC’s financial health after the disinvestment of some of its loss-making units.
ITDC, a PSU under the Ministry of Tourism, runs 16 hotels including Ashoka and Samrat Hotels in New Delhi. However, about 11 of its units are loss-making.
Tourism Minister Mahesh Sharma had recently announced that the government plans to sell of 14 of the hotels except the Ashoka and Samrat hotels in the national capital as it tries to improve the financial health of ITDC.
Sources said while some of the funds from these stake sales will go to the States with which ITDC had a joint venture for the hotels, at least a part of the balance funds that would accrue to the Centre would be ploughed back into the PSU.
The Finance Ministry has also initiated a process of disinvesting 12.03 per cent government equity in the PSU that would help raise about ₹260 crore. Earlier this month, the Department of Investment and Public Asset Management had also invited bids from merchant bankers to manage the stake sale.
The Centre currently holds 87.03 per cent stake in ITDC.
The PSU posted a minor profit after tax of ₹22.55 crore in 2015-16, its fourth year of registering consecutive profits.