Finance Minister Nirmala Sitharaman announced on Wednesday that the government would sell its stake in five PSUs: Bharat Petroleum Corporation Limited (BPCL), the Shipping Corporation of India (SCI), Container Corporation of India (Concor), Tehri Hydro Development Corporation Limited (THDCIL), and the North Eastern Electric Power Corporation Limited (NEEPCO).
This marks the biggest privatisation drive ever approved by the government.
The Cabinet Committee on Economic Affairs (CCEA) approved sale of government's entire 53.29 per cent stake along with transfer of management control in the country's second biggest state owned refiner BPCL after removing Numaligarh refinery from its fold, Finance Minister Nirmala Sitharaman told reporters in Delhi.
It also approved sale of 53.75 per cent out of the government holding of 63.75 per cent stake in SCI and 30.9 per cent stake in Concor. The government currently holds 54.80 per cent in Concor.
Besides, the government will sell its entire holding in THDC India and North Eastern Electric Power Corp Ltd (NEEPCO) to state power generator NTPC Ltd, the minister said.
Parallely, the Cabinet has approved reducing government's stake in select PSUs such as Indian Oil Corp (IOC) to below 51 per cent while continuing to retain management control.
The management control will continue to be retained with the government after considering equity held by other state-run companies in the divested firm.
The government’s disinvestment drive was part of a wider strategy to raise Rs 105,000 crore from the sale of central public sector enterprises (CPSEs), announced earlier in the year.
The sale of BPCL is likely to have ramifications for the company, as rating agency Moody’s had stated in October that it would downgrade the company’s ratings if the government’s stake in it was sold. BPCL is India’s second-largest state-owned refining and marketing company, accounting for 15 per cent of total installed refining capacity.
While normally the sale of BPCL would require both cabinet and parliamentary approval, the government had with the Repealing and Amending Act of 2016 removed the requirement for parliamentary approval.
Another PSU awaiting sale is Air India, which the centre has been keen to sell by the end of the financial year.
Congress leader Rahul Gandhi had earlier opposed the sale of PSUs, in particular, that of CCI, which he called a jewel being sold to “crony capitalists”.
With inputs from PTI