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Covid slowed disinvestment: DIPAM Secy
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SME Times News Bureau | 22 Jul, 2020
The Centres mega disinvestment plan has been impacted by the ongoing
Covid-19 pandemic, making it necessary to extend to some extent the
timelines for the submission of expressions of interest (EOIs), which
have been issued by the government for selling stake in few public
sector companies, said Tuhin Kanta Pandey, Secretary, Department of
Investment and Public Asset Management (DIPAM).
Speaking at
FICCI's 17th annual Capital Market Conference, the official said that
although virtual modes of communication play a major role, there are
several aspects involved in the process, which require physical movement
of people and checking of documents. These have come to a halt now,
Pandey said.
Strategic disinvestment process generally takes 8-9 months, he said.
"To
a lot of extent, Covid has put a brake to this (disinvestment process),
as several processes are involved. To some extent, we have to grant
extensions to the EoIs that we have issued," Pandey said.
Among
the major PSUs put on the block is oil major BPCL and the deadline for
the submission of EoI ends on July 31. The deadline has been postponed
twice earlier as well. According to people in the know of things,
several global and domestic oil giants have shown interest in the public
sector oil major.
The DIPAM Secretary said the government has of
late changed the disinvestment policy towards privatisation, as it
would bring "real benefits", including technological enhancement and
better corporate management, among others.
Noting several
disinvestment plans of the government have not succeeded, the DIPAM
Secretary said that going forward the government's disinvestment plans
would be more successful as the Centre has now started to engage with
prospective investors and buyers.
"Earlier we were secluded from
the investors. We have seen that many of our strategic disinvestments
were not succeeding. We now engage with the investors and recently got
into the engagement processes prior to EoI, through which we are able to
address the concerns of the investors in the EoI," he said.
Regarding
the EoIs sought for Air India, he said the government had restructured
the EoI of AI with a "sense of responsibility that we will complete the
disinvestment this time".
He noted that Covid has made the travel
market uncertain and while domestic travel has picked up to some
extent, international travel has not started at all.
"I think we will have to hold on to it and I would say persist and persevere in these times," he said.
Pandey
also said that the government has now made a change of strategy in
terms of disinvestment -- it has moved from selling stake in loss making
companies to profit making companies.
The official statement
comes at a time when the Centre is planning to expand its disinvestment
plans and considering to bring two key sectors -- banking and insurance
-- into the ambit of its new disinvestment policy.
A new
disinvestment or privatisation policy is in the making and people in the
know of things said that a draft cabinet note is being prepared for the
same, sources said.
Pandey also said that the government will
continue to list those "listable PSUs which are good and compliant to
the Sebi's criteria".
Talking about the proposed initial public
offering for LIC, he said that the process has been set into motion and a
"lot of preparation" is underway for it.
He said the IPO will be very good for the economy and also for the insurance giant's health.
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