COVID crisis may offer HLL Lifecare a breather

Centre likely to rethink on divesting its stakes in the company

The pivotal role being rendered by HLL Lifecare Limited in complementing the Central government’s COVID-19 containment efforts is expected to offer a lifeline to the company that has been listed for disinvestment.

The company is now acting as the nodal agency of the Union Health and Family Welfare Ministry in procuring and distributing medicines and allied accessories. This significant role is expected to make it integral to the functioning of the Union Health Ministry to tackle exigencies in future too, sources said.

Most importantly, while announcing a stimulus package to buttress various sectors from the COVID impact recently, Union Finance Minister Nirmala Sitharaman had said that four public sector undertakings would be retained in all strategic sectors.

While the announcement came as a rude jolt for many PSUs and drew flak from employees and the industry, the announcement has come as a blessing in the case of HLL Lifecare that was making an all-out bid to be in the public sector itself.

Track record

Given its track record and significance, the chances of the Centre reversing its decision to divest its stakes in the company cannot be ruled out. The company is sufficiently armed to reach out all over the State and has adequate resources for enhancing the production of various products that are imperative in the virus control operations, the sources said.

The company had posted an operating profit of ₹50 crore in 2019-20 and it has so far handled purchases to the tune of about ₹2,000 crore since the fight against the virus began.

Braving resistance

On being identified by the NITI Ayog for disinvestment along with a number of other Central PSUs, the preliminary procedures were completed with a specific target braving the stiff resistance of trade unions.

Sources privy to the procedures told The Hindu that a high-level meeting held in January on disinvestment had discussed the Preliminary Information Memorandum that offers an overview of the company and the bidding process to prospective investors for placing their expression of interest.

While the procedures were moving as per a schedule laid by the Centre, the pandemic came as a bolt and stymied the entire process. And now the Centre may have a rethink on shedding its stakes, the sources said.

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Printable version | Jul 2, 2020 3:16:01 PM |

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