In a bid to expedite the process of disinvestment of public sector undertakings as also avoid bunching of public offerings, the Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a proposal for appointment of merchant bankers to be taken up simultaneously with the clearance for stake sale in PSUs.
An official statement on the CCEA decision said: “The appointment of merchant bankers and other intermediaries will now be taken up simultaneously with the process of seeking CCEA approval as soon as the Minister-in-Charge has approved the case.” Accordingly, the ministries concerned will henceforth be required to seek simultaneous approval from the CCEA for selection and appointment of merchant bankers along with consent for disinvestment of the Centre's equity stake in PSUs. “It is expected that the time [thus] saved will be optimally utilised in preparing for the actual transaction and in facilitating the disinvestment process,” it said.
“The approved process will help planning and timing of the public offerings in a manner that they are spread out evenly and avoid bunching as far as possible so as to ensure better response from investors, including retail,” the statement said.
Under the existing approval mechanism, delays occur as ministries have to first seek clearance for disinvestment and then obtain consent for the appointment of merchant bankers on a case-by-case basis. The government has targeted to mop up Rs.40,000 crore through divestment during the current fiscal and among the major PSUs that are to be lined up for stake sale are Coal India Ltd., Indian Oil Corporation, MMTC, RINL, Shipping Corporation, Hindustan Copper, Power Grid Corporation and Manganese Ore India Ltd.