On Monday, a group of Secretaries on disinvestment allowed the sale of Govt’s entire shareholding in four public sector companies – Bharat Petroleum Corp Ltd (BPCL), Shipping Corp of India (SCI), THDC India & NEEPCO, a news agency report said quoting Reuters. It also cleared a sale of 30% equity of Container Corp of India (Concor) from the Govt. holding.
This is the biggest privatization of state-owned public sector companies proposed to be undertaken by an Indian Govt. since the Atal Bihari Vajpayee administration in early 2000.
As far as stake sale of Bharat Petroleum Corp Ltd (BPCL) go
The Govt. holds 53.29% stake in BPCL, 54.8% in Concor & 63.75% in SCI. THDC is a 75:25 joint venture between the Centre & the Uttar Pradesh Govt. Entire equity of North Eastern Electric Power Corporation Ltd (NEEPCO) belongs to the Govt.
At Monday's closing price of ₹470.05 on the BSE, sale of its entire stake in BPCL will fetch the Govt. ₹54,055 crore. Concor stake sale will get the Govt. ₹11,051 crore at the Monday closing price of ₹604.6 on the BSE. Stake sale in SCI will help the Govt. earn ₹1,282 crore. Thus, exit from BPCL & SCI & sale of 30% equity of Concor will help the Govt. collect ₹66,388 crore.
THDC & NEEPCO are unlisted companies & it is likely they could be handed over to NHPC & NTPC respectively, though no confirmation is available on that as yet.
As the Govt.will now have to seek the approval of the two Houses for its sale since the company was formed under an act of Parliament.
The Govt. has a target of mopping up ₹1,05,000 crore through sale of its holding in public sector companies. It has so far collected a mere ₹12,357.49 crore from the exercise. Sale of shares in the companies is crucial as the Govt. struggles to adhere to its FY20 fiscal deficit target of 3.3%, under threat by the huge cut in corporate taxes to 22% from 30% & reduction in Goods & Services Tax (GST) while doing away with the short-lived super-rich tax.
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