The cabinet on Thursday has approved a plan to begin the process of strategic sales and divestment in approximately 20 public sector units. This will further lead to the process of valuing these entities and finding suitable buyers.
The central government will entirely exit Scooters India, Pawan Hans, Hindustan Newsprint, Ferro Scrap Nigam, Bridge & Roof Company India, Projects and Development India, Central Electronics and Hindustan Prefabs. Additionally, it will also cut its stake in profit making firm BEML to 28 percent from 54 percent earlier.
Some units of Cement Corporation of India, the Nagarnar Steel plant of NMDC and Bhadrawati, Salem and Durgapur plants of SAIL will also be sold. The stake sale would happen in a two-stage auction process, which would include technical and financial bid.
"The recommendations of the NITI Aayog with regard to both divestment and strategic sale came up for consideration. In principle, the cabinet has approved the recommendations with regard to some of the units," Finance Minister Arun Jaitley said in a briefing to the press.
Analysts, however, are doubtful whether the government will meet this year's strategic sale target of Rs 20,500 crore since the process of these sales will take about six-to-eight months.
A senior government official said the department of Investment and public asset management (DIPAM), along with the ministers concerned will now start the process of estimating the value of these companies, finding a prospective buyer and the method of selling these companies. Once the process is completed, the cabinet will be approached for a final approval.