Disinvestment: 25% equity stakes in 4 defense firms via IPOs
The center is now mulling on selling 25% equity stakes in four state-run defense companies under Department of Defence via IPOs. It has invited proposals for the same. This gives further momentum to the disinvestment drive that's been kick-started by the present NDA government to sell equity stakes of profitable Public Sector Undertakings (PSU)s and raise funds for nation's development. Here's more about it.
What's the plan?
NDA government has been conducting strategic stake sale in PSUs for some time now to garner revenue and cushion the gap in the fiscal deficit of the country. For the current fiscal, it has set a steep target of earning Rs. 72,500 crore by selling stakes in state-run enterprises. In the last fiscal, it had raised Rs. 46,247 crore, its highest till date.
How's the government going about it?
Till now, in this fiscal, it has sold equity stakes in Hindustan Copper, Cochin Shipyard, HUDCO, L&T, Dredging Corporation and others. IPOs (initial public offerings) will be held for the sale of stakes in Mazagon Dock Ltd, Bharat Dynamics Ltd, Garden Reach Shipbuilders & Engineers Ltd and Mishra Dhatu Nigam Ltd. Proposals will have to reach the authorities by August 18, 3 pm.
Moreover, the government will sell 10% equity stakes in three major PSUs -IRCTC, Ircon and IRFC- via IPOs. According to reports, it is also mulling on selling 10% equity stakes each in major enterprises like Bharat Heavy Electricals Ltd and Oil India Ltd. Listing of five state-run general insurance companies has also been okayed and would likely start in the next financial year.