NEW DELHI: The Cabinet has approved listing of 11 central public sector enterprises, including five PSUs under the railway ministry and four defence companies.
“The Cabinet Committee on Economic Affairs (CCEA) has given its approval for listing of 11 CPSEs (Central Public Sector Enterprises) on stock exchanges,” an official statement said.
The PSUs under the railway ministry that will launch initial public offerings (IPO) are Rail Vikas Nigam Ltd, IRCON International Ltd, Indian Railway Finance Corporation (IRFC) Ltd, Indian Railway Catering and Tourism Corporation (IRCTC) and RITES Ltd.
The defence ministry PSUs to be listed on bourses include Bharat Dynamics Ltd, Garden Reach Shipbuilders & Engineers, Mazagon Dock Shipbuilders Ltd and Mishra Dhatu Nigam Ltd.
Also, MSTC under the administrative control of the steel ministry, and power PSU North Eastern Electric Power Corporation (NEEPCO) are also up for disinvestment through IPO route.
The statement said listing of CPSEs will be through public offer of shares up to 25 per cent of Government of India’s shareholding, which may include offer of fresh shares for raising of resources from market.
“However, actual disinvestment in respect of each CPSE along with the mode of raising resources has been delegated for decision on a case to case basis to the Alternative Mechanism, headed by the Finance Minister,” it added.
The CCEA has also approved reservation of shares for eligible employees of 11 CPSEs as per SEBI norms.
“With a view to ensure wider participation by small investors in the CPSEs’ disinvestment programme, a price discount up to 5 per cent on the issue price has also been approved for the retail investors and eligible employees of 11 CPSEs participating in this offer,” it added.
Once the book value of 11 CPSEs is discovered through the listing process, it will facilitate raising of resources by these companies at comparable cost and hence, achieve higher growth through their expansion/diversification. This will also be reflected in the performance at the sectoral level and overall economic growth, the statement added.
Listing of CPSEs will also promote ‘people’s ownership’ by encouraging public participation in CPSEs and will also also trigger multilayered oversight mechanism, which not only enhance shareholders’ value but also promotes corporate governance norms in such companies.
“With general public becoming the shareholder in the company through the listing route, the management is open to public scrutiny and thus become more accountable to its shareholders, as per the extant disclosure norms and compliance for listed CPSEs,” the statement added.
In the 2017-18 budget, the government set a target of Rs 46,500 crore to be mobilised through minority stake sale and Rs 15,000 crore from strategic disinvestment.