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Process of disinvestment
Disinvestment Commissions Recommendations.
Consideration by Core Group of Secretaries on Disinvestment (CGD)
Approval of Cabinet Committee on Disinvestment
Appointment of Legal Advisor and Asset Valuer.
Advertisement for inviting bidders.
Short-listing of bidders.
Finalization of Shareholders Agreement/ Share Purchase/ Other agreements etc.
Receipt of final bids and bid evaluation.
CCD, Securities Exchange Board of India and other regulatory approvals.
Execution of legal documents and inflow of funds Public offer announcement by
the strategic Partner, as per SEBI takeover Code, wherever applicable.
OBJECTIVES
To Improve Performance of Units.
TYPES OF DISINVESTMENT
Minority Disinvestment
Majority Disinvestment
Complete Privatization
2009-10 Onwards
The Government Started The Process By Selling Minority Stakes
In Listed And Unlisted (profit-making) PSUs.
NHPC Ltd.
Oil India Ltd.
NTPC Ltd.
National Mineral Development Corporation Ltd.
Coal India Ltd. etc. Through Public Offers.
Disinvestment Activity Has Slowed Down In 2011.
As Against a Target of Rs.40,000 Cr. For 2011-12, The
Government Was Able To Raise Only Rs.14,000 Cr.
Company
BHEL
NBCC
ONGC
MOIL LTD.
COAL INDIA LTD.
Demerits of Disinvestment
Result In Loss of Regular Source of Income To The
Government.
Leads To Concentration of Power.
Monopoly of Private Sector.
Employees of PSUs would lose jobs.
The Loss of PSUs Is Rising. It Was 9305 Cr. In 1998 And
10060 Cr. In 2000.
Do you know
PSUs constitute 19% of the total market capitalisation of companies
listed at BSE.
VSNL was the first PSU to be divested by way of a Public Offer in
1999-00.
ONGC Public Offer in 2003-04 has been the largest ever PSU FPO,
raising Rs. 10,542 Cr.
Coal India Public Offer in 2010-11 has been the largest ever PSU
IPO, raising Rs. 15,199 Cr.
In 11 recent PSU Offerings (NTPC, PFC, PGCI, REC, NHPC, OIL,
SJVN, CIL, MOIL, PSB and NBCC), the government has made an
overall gain of Rs. 1,50,415 Cr. over the issue price (as on 31 August
2014) since their listing dates.
References
http://www.divest.nic.in/
http://www.bsepsu.com/
http://www.worldbank.org/
http://www.divest.nic.in/Recent.asp/