25% Of This Big Govt PSU Will Be Sold To Private Investors Via IPO (Full Details)
As a part of its ambitious disinvestment drive of Rs 1.75 lakh crore, the government has initiated the stake sale process of 25% government stake in National Seeds Corporation Limited through an initial public offering (IPO).
The NSC is wholly-owned by the Government of India, meaning the Government has 100% stake in it. It lies under the administrative control of the Department of Agriculture Cooperation & Farmers Welfare, Ministry of Agriculture and Farmers Welfare.
DIPAM Extends Bidding Proposals to Bankers
The Government has plans to appoint two bankers to oversee and manage the stake sale process of NSC.
As a result, the Department of Investment and Public Asset Management (DIPAM) has invited merchant bankers in the bidding process of the 25% stake sale of NSC.
DIPAM has also invited legal advisors for working on the proposed IPO and subsequent stock exchange listing of the PSU under the Ministry of Agriculture and Farmers Welfare, adds a wire feed agency.
Speaking of inviting proposals from merchant bankers for the disinvestment process of NSC, DIPAM adds that the last date for submitting bids by merchant bankers and legal advisors is September 1.
NSC had reported a profit after tax of Rs 9.92 crore for the FY2020. The miniratna PSU’s outstanding net worth stood at Rs 646.37 crore in March 2020.
Disinvestment Drive Plans Delayed to Upcoming Year
Of the disinvestment target set, the government has secured about Rs 8,368 crore by selling stake in Axis Bank, NMDC Ltd and Housing and Urban Development Corp (HUDCO), by far.
The state-owned BPCL is the country’s third-biggest oil refiner and second-largest fuel retailer. The Union Cabinet approved the government’s plan of selling all of their 52.98% stake in the company to private players, in November 2019.
Around the time of proposal, the government’s stake in BPCL was worth about Rs 60,000 crore.
The stake sale process was scheduled for FY22 but due to the slowdown in the preparatory processes of the much-awaited LIC IPO (due to the pandemic), the process for BPCL is most likely to be shifted to the upcoming financial year 2022-2023.
The IPO of LIC is anticipated to be among the biggest contributors to the budgeted disinvestment target of this fiscal. LIC is believed to be worth Rs 8-11.5 lakh crore, meaning a 10% IPO could fetch the government Rs 80,000-110,000 crore.
Sources have also confirmed that while the stake sale discussions of BPCL with the potential buyers have slowed down, the divestment idea has not been dropped. Three private players are reportedly showing interest in the BPCL disinvestment, one of which is Vedanta.