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From Air India to BPCL to Container Corp ⁠— new ministers Scindia, Sonowal and others have nine months to execute key share sales

The government has merged the Department of <keyword id="108214" type="CITY" weightage="20" keywordseo="Public-Enterprises">Public Enterprises</keyword> (DPE) with the finance ministry to give it a better control over state-owned firms and facilitate its ambitious privatisation programme. Finance ministry will now have six departments while DPE's hereto parent ministry, the ministry of heavy industries and public enterprises will now be called the ministry of heavy industries. Previously, the <keyword id="44532" type="PERSON" weightage="20" keywordseo="Disinvestment">disinvestment</keyword> ministry - created under the Atal Bihari Vajpayee government - was merged with the Finance Ministry and is now a department under it. Also, <keyword id="62529" type="ORGANIZATION" weightage="20" keywordseo="Foreign-Investment-Promotion-Board">Foreign Investment Promotion Board</keyword> (FIPB) was abolished and administration of foreign investments was given to the Finance Ministry (FinMin). The shift of DPE to the finance ministry will help in efficient monitoring of the capital expenditure, asset monetisation and financial health of the Central Public Sector Enterprises (CPSEs). "<keyword id="156153" type="ORGANIZATION" weightage="20" keywordseo="Ministry-of-Finance">Ministry of Finance</keyword> (<keyword id="11588398" type="UNKNOWN" weightage="20" keywordseo="vitta-mantralaya">Vitta Mantralaya</keyword>), after the sub-heading (v) Department of <keyword id="6354241" type="UNKNOWN" weightage="20" keywordseo="Financial-services">Financial Services</keyword> (Vittiya Sewayen Vibhag), following sub-heading shall be inserted, namely:- (vi) Department of Public Enterprises (Lok Udyam Vibhag)" as per the Cabinet Secretariat notification dated July 6, 2021. The rejig comes ahead of Cabinet expansion slated later in the day. The gazette notification issued said these rules may be called the government of India (Allocation of Business) Three Hundred and Sixty First Amendment Rules, 2021. "They shall come into force at once," the notification said. Presently, the finance ministry has five departments -- Economic Affairs, Revenue, Expenditure, Investment and Public Asset Management and Financial Services. With the addition, this will be the sixth department under the finance ministry. Giving details of the functions performed by the DPE, the notification said coordination of matters of general policy affecting all Public Sector Enterprises (PSEs), evaluation and monitoring the performance of PSEs, including the memorandum of understanding mechanism, review of capital projects and expenditure in CPSEs. Besides, the DPE frames measures aimed at improving performance of CPSEs and other capacity building initiatives of PSEs, rendering advice relating to revival, restructuring or closure of PSEs including the mechanisms, counselling, training and rehabilitation of employees in CPSEs under Voluntary Retirement Scheme and categorisation of CPSEs including conferring 'Ratna' status, among others. The heavy industries ministry will continue to be the administrative ministry related primarily to the capital goods sector. As many as 44 CPSEs including Maruti Udyog Limited, BHEL, Cement Corporation, <keyword id="173465" type="CITY" weightage="20" keywordseo="Scooters-India">Scooters India</keyword>, HMT and various other subsidiaries would be under the Ministry of Heavy Industries. Many companies under the ministry are sick and up for sale under the disinvestment programme of the government. Finance minister Nirmala Sitharaman in her Budget 2021-22 already announced that a revised mechanism for fast-tracking closure of loss making PSUs would be worked out and an incentive package would be developed to incentivise states to sell stake in state PSUs. To monetise lands owned by CPSEs, a special purpose vehicle (SPV) would be developed. She also announced a big-ticket privatisation agenda, including privatisation of two public sector banks and one general insurance company to garner Rs 1.75 lakh crore from stake sale in public sector companies and financial institutions during 2021-22. As part of the divestment strategy for the financial sector, the government has decided to go for a mega initial public offering (IPO) of Life Insurance Corporation of India (LIC) and residual stake sale in IDBI Bank during the financial year beginning April. Besides, strategic sale of Bharat Petroleum Corporation Ltd (BPCL), <keyword id="11588399" type="UNKNOWN" weightage="20" keywordseo="shipping-corp-container-corporation">Shipping Corp, Container Corporation</keyword>, <keyword id="2459265" type="PERSON" weightage="20" keywordseo="Neelachal-Ispat-Nigam-Ltd">Neelachal Ispat Nigam Ltd</keyword>, <keyword id="132488" type="COMPANY" weightage="20" keywordseo="Pawan-Hans">Pawan Hans</keyword>, Air India among others, would be completed in 2021-22. In September 2020, the government had apprised that out of the 34 PSUs approved for disinvestment so far, transactions were completed for eight. Transactions for four PSUs were halted as they are recommended for closure. Two of them were held up due to litigation, while transactions for 20 PSUs are in the process. SEE ALSO- <a href="https://www.businessinsider.in/stock-market/news/clean-science-and-technology-ipo-maximum-broking-house-recommending-this-ipo/articleshow/84193873.cms" data-type="tilCustomLink">Clean Science and Technology, an Indian supplier to Bayer, has opened its IPO ⁠— and ‘subscribe’ is the unanimous call from analysts</a> <a href="https://www.businessinsider.in/stock-market/news/gr-infraprojects-ipo-good-ipo-bet-for-long-term-as-per-analysts/articleshow/84193656.cms" data-type="tilCustomLink">GR Infraprojects IPO is for long term investors, say analysts</a>

Government merges the Department of Public Enterprises with the Finance Ministry to bring better control over state-owned firms

New Delhi, Nov 21 () Shares of Bharat Petroleum Corp Ltd (BPCL) and Shipping Corp of India (SCI) tumbled on Thursday after the Cabinet approved sale of government's stake in these companies.
 Shipping Corp stock dropped 6.29 per cent to close at Rs 64.05 on the BSE. During the trade, it declined 7 per cent to Rs 63.50.
 The scrip of BPCL plunged 5.66 per cent to close at Rs 513.80. During the day, it tanked 6.15 per cent to Rs 511.10.
 Both BPCL and Shipping Corp had hit their respective 52-week highs in early trade.
 Container Corp stock fell 0.49 per cent to Rs 575.15. In intra-day, it dipped 0.78 per cent to Rs 573.45.
 During the early trade these scrips had shown mixed trend.
 In the biggest privatisation drive ever, the Union Cabinet on Wednesday approved sale of government's stake in blue-chip oil firm BPCL, shipping firm SCI and cargo mover Concor as well as decided to cut shareholding in select public sector firms below 51 per cent to boost revenue collections that have been hit by slowing economy.
 The Cabinet Committee on Economic Affairs (CCEA) approved sale of government's entire 53.29 per cent stake along with transfer of management control in the country's second-biggest state-owned refiner Bharat Petroleum Corp Ltd after taking out Numaligarh refinery from its fold, Finance Minister Nirmala Sitharaman told reporters on Wednesday.
 It also approved the sale of an entire 63.75 per cent government holding in Shipping Corp of India (SCI) and a 30.8 per cent stake in Container Corp of India (Concor).
 The government currently holds 54.80 per cent in Concor and will retain 24 per cent stake post sell-off but without any veto powers or management say, Disinvestment Secretary Tuhin Kanta Pandey said. SUM SHW
SHW

BPCL, SCI shares tumble after privatisation move

New Delhi, Nov 21 () Oil Minister Dharmendra Pradhan on Thursday hinted that public sector firms such as Indian Oil Corporation (IOC) may not be allowed to bid for buying government stake in Bharat Petroleum Corporation Ltd (BPCL), for which a buyer may have to shell out as much as Rs 90,000 crore.
 The Cabinet Committee on Economic Affairs had on Wednesday decided to sell the government's entire stake in the country's second-largest state refiner BPCL and India's largest shipping company Shipping Corporation of India (SCI). It also approved privatisation of Container Corporation of India while also giving nod to paring stake below 51 per cent in select public sector undertakings but without losing control.
 "Since 2014, we have a clear vision that the government has no business to be in business," Pradhan told reporters here. "We have examples of 2-3 sectors such as telecom and aviation where ushering in private participation has led to customers benefiting from price cuts, efficiency, and better service. And yesterday (on Wednesday), several reformist decisions were taken."
 BPCL will give buyers ready access to 14 per cent of India's oil refining capacity and about one-fourth of the fuel marketing infrastructure in the world's fastest-growing energy market.
 It, however, will be sold after carving out Numaligarh Refinery from its portfolio and given to a pubic sector unit.
 "Numaligarh refinery was set up as per Assam Accord and it will remain a public sector unit. Assam Chief Minister had requested Prime Minister (Narendra Modi) to retain public sector character of Numaligarh Refinery and that has been accepted," he said.
 Pradhan, however, did not say if IOC or Oil India Ltd, which already has a stake in the refinery and also supplies crude oil to it, will take over the unit.
 "The details have to be worked out," he said. "Finance Minister (Nirmala Sitharaman) has stated that the privatisation of BPCL will happen this fiscal and we hope to adhere to the timeline."
 Asked if public sector units will be allowed to bid for the government's 53.29 per cent stake, he said: "Nitty gritty and details of the disinvestment process will have to be worked out but when I say the government has no business to be in business, it is indicative of possible future course of action."
 At the current trading price of BPCL, the government's 53.29 per cent stake is valued at a shade less than Rs 62,000 crore. On top of this, the acquirer will have to make an open offer to buy an additional 26 per cent stake from minority shareholders for about Rs 30,000 crore.
 Last year, the government had sold its entire stake in Hindustan Petroleum Corp Ltd (HPCL) to state-owned Oil and Natural Gas Corp (ONGC) for Rs 36,915 crore.
 Pradhan said the privatisation of BPCL was following the policy of ushering in greater competition in sectors that can sustain on their own.
 Greater private participation, like in the telecom and aviation sector, will bring about efficiencies and better service to consumers, he said.
 The CCEA had on Wednesday also approved the sale of an entire 63.75 per cent government holding in SCI and 30.8 per cent out of the government's 54.80 per cent stake in Container Corp of India (Concor).
 Besides, the government will sell its entire holding in THDC India Ltd (THDCIL) and North Eastern Electric Power Corp Ltd (NEEPCO) to state-owned power generator NTPC Ltd, the finance minister has said.
 The government holds 74.23 per cent in THDCIL and 100 per cent NEEPCO.
 Parallelly, the Cabinet had also approved reducing government stake in select PSUs such as IOC to below 51 per cent while continuing to retain management control.
 The management control will continue to be retained with the government after considering equity held by other state-owned companies in the divested firm.
 The government, currently, holds 51.5 per cent in IOC and another 25.9 per cent through state-owned Life Insurance Corp of India (LIC), and explorers ONGC and Oil India Ltd (OIL), and the government can potentially sell 26.4 per cent for about Rs 33,000 crore.
 A similar formula can also apply to ONGC and gas utility GAIL India Ltd.
 The stake sales are critical for the government to meet its disinvestment target of Rs 1.05 lakh crore set for the current financial year.
 At current prices, the government's 30.8 per cent stake in Concor is worth about Rs 10,800 crore, while stake sale in SCI will fetch just over Rs 2,000 crore.
 BPCL operates four refineries in Mumbai, Kochi (Kerala), Bina (Madhya Pradesh) and Numaligarh (Assam) with a combined capacity of 38.3 million tonnes per annum, which is 15 per cent of India's total refining capacity of 249.4 million tonnes. After removing three million tonnes capacity of the Numaligarh refinery, the new buyer will get 35.3 million tonnes of refining capacity.
 It also owns 15,177 petrol pumps and 6,011 LPG distributor agencies in the country. Besides, it has 51 LPG (liquefied petroleum gas) bottling plants. The company distributes 21 per cent of petroleum products consumed in the country by volume as of March this year and has more than a fifth of the 250 aviation fuel stations in the country.
 The government is keen to get international energy majors such as Saudi Aramco, Total SA of France and ExxonMobil to operate in the downstream fuel marketing business so as to bring in greater competition.
 Currently, 95 per cent of retail petrol and diesel sales and near 100 per cent of cooking gas (LPG) and kerosene sales are controlled by the public sector units.
 As on March 31, BPCL reported cash and cash equivalents of around Rs 5,300 crore, against Rs 10,900 crore of debt maturing over the next 15 months. ANZ HRS

IOC, other PSUs not to bid for BPCL, hints Pradhan

New Delhi, Nov 24 () In part indication of timelines for privatisation of India's second biggest state oil refiner, the government has set a 50-day deadline for an outside 'asset valuer' to carry out the valuation of all assets of Bharat Petroleum Corp Ltd (BPCL), a process once completed will trigger invitation of price bids from potential acquirers.
The Cabinet Committee on Economic Affairs (CCEA) had on November 20 given a go-ahead for sale of government's entire stake in BPCL, Shipping Corporation of India Ltd (SCI), power generator THDC India Ltd (THDCIL) and North Eastern Electric Power Corp Ltd (NEEPCO) to a strategic investor along with management control. It had also approved sale of 30.8 per cent out of its 54.8 per cent interest in Container Corp of India Ltd (Concor).
The stake sale will follow a two-stage process of first inviting expression of interest (EoI) from potential bidders who will after due diligence will be asked to submit price bids in the second part, officials said.
In the run-up to the decision, the Department of Investment and Public Asset Management (DIPAM) -- the department in finance ministry responsible for disinvestment in PSUs -- had on October 11 issued advertisements seeking transaction and legal advisors as well as asset valuers for the stake sale but masked the identity of the state-owned firm by merely saying they operate under administrative control of the Ministry of Petroleum and Natural Gas, or Ministry of Power, or Ministry of Shipping or Ministry of Railways.
Soon after the Cabinet approval, DIPAM unmasked the identity of disinvestment targets by issuing 'corrigendum' to the October 11 Request for Proposals (RFPs).
The RFP wanted Asset Valuer to "identify, describe and list all properties and assets, including intangibles" and value them according to "comparison method, income capitalisation, discounted cash flow, cost approach method or replacement valuation" method.
It wanted the asset valuer to complete its "valuation report within a period of 50 days from the date of issue of appointment letter " in case of BPCL, according to RFP.
Last day for submission of bids for appointment as asset valuer was November 4.
Official said DIPAM may invite EoI from potential bidders pending receipt of valuation report but price bids will come in only after getting the valuation report.
A similar process will be followed for India's biggest shipping line SCI and country's largest onland cargo mover Concor, they said.
THDCIL and NEEPCO will be sold to state-owned NTPC Ltd based on valuation report of DIPAM advisers.
Three separate sets of advisors will be appointed for each of the firms for conducting the transaction, preparing legal documents and doing asset valuation.
DIPAM in the corrigendum said: "Strategic disinvestment of state of Government of India in a CPSE may be read as 'Strategic disinvestment of Government of India shareholding of 53.29 per cent in BPCL (except its equity shareholding of 61.65 per cent in Numaligarh Refinery Ltd (NRL) and management control thereon) along with transfer of management control to a strategic buyer."
The 61.65 per cent of BPCL shareholding in NRL along with management control will be transferred to "a central public sector enterprise (CPSE) operating in the oil and gas sector".
It said the government will see 30.8 per cent out of 54.8 per cent stake in Concor to a strategic buyer along with management control and all of government holding in SCI. ANZ MKJ

BPCL asset valuer asked to submit valuation of company in 50 days

New Delhi, Nov 21 () Industry body Ficci on Thursday hailed the centre's go-ahead to the sale of its stake BPCL, SCI and Concor stating that the move would strengthen the performance of these companies and bring in fresh investments for both modernisation and expansion.
 "It is encouraging to see the government take further steps to push the reforms agenda as well as address some of the critical pain points of industry. The decision to undertake strategic disinvestment and transfer management control in entities like Shipping Corporation of India (SCI), Bharat Petroleum Corporation Limited (BPCL) and Container Corporation of India (Concor) are welcome," Ficci President Sandip Somany said in a statement.
 Further, the decision to give greater operational authority to the board of National Highways Authority of India (NHAI) and enabling it to securitise user fee receipts for raising long-term funds from banks is another major positive, Somany said.
 "The roads and highways sector will get a further fillip through this move; and given its multiplier impact, we hope to see other related sectors also witnessing improvement in their performance," Somany added.
 The decision to set up a unified regulatory body to supervise the activities of financial services providers in the International Financial Services Centre (IFSC) will add to the ease of doing business for firms that set up a base in IFSC and Ficci welcomes this single window facilitation, he said.
 Another notable decision of the government is the relief provided to the telecom sector by way of deferment of receipt of spectrum auction instalments due from telecom service providers for the year 2020-21 and 2021-22, the industry body said.
 "This move should provide some headroom to the telecom sector in the country as it is seeing a lot of stress. We must ensure the viability of the sector and Ficci hopes that this is the first step in that direction with more support in the offing from the government," according to Somany.
 Finally, on the labour code, the industry body noted the approval accorded by the government to the Industrial Relations Code. "This forward movement is noteworthy and we hope that with this move we have moved further ahead on having in place balanced labour regulations in the country that take account of the interest of both the employers and the employees."
 The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved sale of government's entire 53.29 per cent stake along with transfer of management control in the country's second biggest state owned refiner Bharat Petroleum Corp Ltd (BPCL) after removing Numaligarh refinery from its fold.
 It also approved sale of the entire government holding of 63.75 per cent in Shipping Corporation of India (SCI) and 30.9 per cent stake in Container Corp of India (Concor). SID SID ANS
ANS

Stake sale in BPCL, SCI, Concor to strengthen firms, bring in fresh investments: Ficci

New Delhi, Nov 21 () Shares of Bharat Petroleum Corp Ltd (BPCL), Shipping Corp of India (SCI) and Container Corp of India (Concor) showed mixed trend on Thursday after the Cabinet approved sale of government's stake in these companies.
 BPCL which opened the day 0.92 per cent higher at Rs 549.70 -- its 52-week high -- later erased the gains and fell to a low of Rs 527.35, down 3.17 per cent over its previous close on BSE.
 Shares of Shipping Corp also rose 2.12 per cent to hit a one year high of Rs 69.80 in opening trade but later pared the gains. It declined to Rs 64.80, lower by 5.19 per cent over its last close.
 However, Container Corp shares jumped 4.67 per cent to Rs 605.
 In the biggest privatisation drive ever, the Union Cabinet on Wednesday approved sale of government's stake in blue-chip oil firm BPCL, shipping firm SCI and cargo mover Concor as well as decided to cut shareholding in select public sector firms below 51 per cent to boost revenue collections that have been hit by slowing economy.
 The Cabinet Committee on Economic Affairs (CCEA) approved sale of government's entire 53.29 per cent stake along with transfer of management control in the country's second-biggest state-owned refiner Bharat Petroleum Corp Ltd after taking out Numaligarh refinery from its fold, Finance Minister Nirmala Sitharaman told reporters on Wednesday.
 It also approved the sale of an entire 63.75 per cent government holding in Shipping Corp of India (SCI) and a 30.8 per cent stake in Container Corp of India (Concor).
 The government currently holds 54.80 per cent in Concor and will retain 24 per cent stake post sell-off but without any veto powers or management say, Disinvestment Secretary Tuhin Kanta Pandey said. SUM 
DRR

BPCL, SCI shares hit 52-week high after privatisation move; pares gain later

New Delhi, Nov 21 () Shares of Bharat Petroleum Corp Ltd (BPCL), Shipping Corp of India (SCI) and Container Corp of India (Concor) showed mixed trend on Thursday after the Cabinet approved sale of government's stake in these companies.
 BPCL which opened the day 0.92 per cent higher at Rs 549.70 -- its 52-week high -- later erased the gains and fell to a low of Rs 527.35, down 3.17 per cent over its previous close on BSE.
 Shares of Shipping Corp also rose 2.12 per cent to hit a one year high of Rs 69.80 in opening trade but later pared the gains. It declined to Rs 64.80, lower by 5.19 per cent over its last close.
 However, Container Corp shares jumped 4.67 per cent to Rs 605.
 In the biggest privatisation drive ever, the Union Cabinet on Wednesday approved sale of government's stake in blue-chip oil firm BPCL, shipping firm SCI and cargo mover Concor as well as decided to cut shareholding in select public sector firms below 51 per cent to boost revenue collections that have been hit by slowing economy.
 The Cabinet Committee on Economic Affairs (CCEA) approved sale of government's entire 53.29 per cent stake along with transfer of management control in the country's second-biggest state-owned refiner Bharat Petroleum Corp Ltd after taking out Numaligarh refinery from its fold, Finance Minister Nirmala Sitharaman told reporters on Wednesday.
 It also approved the sale of an entire 63.75 per cent government holding in Shipping Corp of India (SCI) and a 30.8 per cent stake in Container Corp of India (Concor).
 The government currently holds 54.80 per cent in Concor and will retain 24 per cent stake post sell-off but without any veto powers or management say, Disinvestment Secretary Tuhin Kanta Pandey said. SUM
DRR

New Delhi, Nov 21 () India Inc on Thursday welcomed the government's decision to defer receipt of spectrum auction installments due from telecom service providers, saying the move will provide headroom to the sector currently facing stress, generate job opportunities and drive consumer demand.
 The government on Wednesday doled out a Rs 42,000 crore relief to debt-laden telecom companies after it agreed not to take any payments for spectrum they use for the next two years.
 The Union Cabinet headed by Prime Minister Narendra Modi approved giving Bharti Airtel, Vodafone Idea Ltd and Reliance Jio an option to avail a two-year moratorium on payments they were supposed to make in yearly installments for the spectrum bought in auctions.
 This is a great breakthrough in the economic reform system and will have a positive impact on the growth and development of telecom sector and the economy as a whole, PHD Chamber of Commerce and Industry President D K Aggarwal said.
 Deferment of spectrum auction installments will provide a pronounced relief to stressed telecom service providers leading to their continuous operations, ease their cash outflow and give them window to make payments for statutory liabilities and interest on bank loans, Aggarwal said.
 As the telecom sector is one of the major growth driver of economy, this move is welcomed as it will generate employment opportunities for the potential workforce, drive consumer demand sentiments in the economy, provide further impetus and pave way to achieve USD 5 trillion economy going forward, he added. 
 "Another notable decision of the government is the relief provided to the telecom sector by way of deferment of receipt of spectrum auction instalments due from telecom service providers for the year 2020-21 and 2021-22," Ficci President Sandip Somany said.
 The move should provide some headroom to the telecom sector in the country as it is seeing a lot of stress, he said.
 Describing the strategic sale of CPSEs as a major reform, Assocham said the decision reflects the clear mind set of the government about steadily moving out of businesses.
 "The underlying thinking is that the government has no business to be in business. It is a welcome and a major policy change," Assocham President BK Goenka said.
 Besides, the bill cleared by the Cabinet for allowing fixed term employment is a good and decisive starting point for labour reforms, Goenka said.
 The Centre on Wednesday approved the Industrial Relation Code Bill, which is the third code under labour reforms. 
 The government wants to codify 44 central labour laws into four broad codes.
 While the Code on Wages has already been approved by the Parliament, the Labour ministry will push the Code on Occupational Safety, Health and Working Conditions Bill in the Budget Session. 
 The Code on Social Security is in pre-legislative stage.
 The bill provides for setting up a two-member tribunal (in place of one-member), thus introducing a concept that some of the important cases will be adjudicated jointly and the rest by a single-member, resulting in speedier disposal of cases.
 The Cabinet Committee on Economic Affairs (CCEA) also approved sale of government's entire 53.29 per cent stake along with transfer of management control in the country's second biggest state-owned refiner Bharat Petroleum Corp Ltd (BPCL) after removing Numaligarh refinery from its fold.
 It also gave a nod to sale of the entire government holding of 63.75 per cent in Shipping Corporation of India (SCI) and 30.9 per cent stake in Container Corp of India (Concor). RSN RVK

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From Air India to BPCL to Container Corp ⁠— new ministers Scindia, Sonowal and others have nine months to execute key share sales

Bhakti Makwana

Government merges the Department of Public Enterprises with the Finance Ministry to bring better control over state-owned firms

PTI

BPCL, SCI shares tumble after privatisation move

PTI

IOC, other PSUs not to bid for BPCL, hints Pradhan

PTI

BPCL asset valuer asked to submit valuation of company in 50 days

PTI

Stake sale in BPCL, SCI, Concor to strengthen firms, bring in fresh investments: Ficci

PTI

BPCL, SCI shares hit 52-week high after privatisation move; pares gain later

PTI

BPCL, SCI shares hit 52-week high after privatisation move; pares gain later

PTI

Deferment of spectrum payment to provide headroom to telecom sector: India Inc

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