BUSINESS
Prasad, however, did not elaborate on the timing of the share sale or how much it is looking to raise from the divestment of its stake in these PSUs.
The Union Cabinet on Friday said that six public sector undertakings, including Tehri Hydro Development Corporation Ltd, Telecommunication Consultants (India) Ltd, RailTel Corporation India Ltd will come up with initial public offers (IPO), while Kudremukh Iron Ore Company Ltd will issue a follow-on public offer (FPO).
The Cabinet Committee of Economic Affairs (CCEA) has given its approval to list seven central public sector enterprises (CPSE) on the stock exchange through initial public offering (IPO) or further public offer (FPO), law minister Ravi Shankar Prasad told reporters in New Delhi.
The six companies, which will be listed on the bourses are Telecommunication Consultants (India) Ltd (TCIL), RailTel Corporation India Ltd, National Seed Corporation India Ltd (NSC), Tehri Hydro Development Corporation Ltd (THDC), Water & Power Consultancy Services (India) Ltd (WAPCOS Ltd), and FCI Aravali Gypsum and Minerals (India) Ltd (FAGMIL).
"Listing will help CPSE to unlock their potential and value," Prasad said, adding that the listing is also expected to encourage investor participation in the CPSEs.
Prasad, however, did not elaborate on the timing of the share sale or how much it is looking to raise from the divestment of its stake in these PSUs.
The government said, in a statement, that an alternative mechanism, comprising of the Finance Minister, Minister of Road Transport and Shipping and the minster of concerned administrative ministry has been empowered to decide on extent, mode of disinvestment, pricing, time etc. of listed CPSEs (including CPSEs to be listed in future).
The scope of eligibility criteria for listing of CPSEs has also been expanded. CPSEs, with positive net worth and net profit in any of the immediately three preceding financial years, shall be eligible for listing on the stock exchange, the statement said.
TCIL is an engineering and consultancy company, under the Department of Telecommunications (DOT). It was set up in 1978 for providing Indian telecom expertise in all fields of telecom, civil and IT to developing countries around the world. The company reported a turnover of Rs 1,205 crore during the year 2016-17. Turnover of 2017-18 is not available on the company's website.
A 'Mini Ratna' (Category-I) entity, RailTel Corporation, claims to be one of the largest neutral telecom infrastructure providers in the country, owning a pan-India optic fiber network on exclusive right of way (ROW) along railway track. In 2017-18, the company reported a consolidated turnover of Rs 1,031 crore with a profit of Rs 158 crore.
NSC is another 'Mini Ratna' (Category-I) company, under the Ministry of Agriculture and Farmers Welfare, established in 1963 to undertake production of foundation and certified seeds. It reported a turnover of Rs 707.9 crore from sale of certified seeds.
THDC is a joint venture between the Union government and the government of Uttar Pradesh in an equity ratio of 75:25. The company was incorporated in 1988 to develop, operate and maintain the 2,400 MW Tehri Hydro Power Complex and other hydro projects. Also a 'Mini Ratna' (Category-I) firm, THDC, reported a turnover of Rs 2,228.73 crore and a profit after tax (PAT) of Rs 778.74 crore.
'Mini Ratna' (Category-I) company under the ministry of water resource, river development and Ganga rejuvenation WAPCOS Ltd is a consultancy and engineering, procurement and construction (EPC) providing integrated and customised solutions for sustainable development of water, power and infrastructure projects. It reported revenue from operations of Rs 921.36 crore in 2016-17 and a PAT of Rs 107.02 crore.
FAGMIL is under the Department of Fertilisers and is engaged in producing agriculture and mineral gypsum. It has a turnover of Rs 48.6 crore in 2017-18.
KIOCL Limited, which was set up in 1976, enjoys a 'Mini Ratna' status and has expertise in iron ore mining, filtration technology and production of high quality pellets. It reported revenue from operations of Rs 1,605.41 crore and PAT of Rs 81.48 crore in 2017-18. KIOCL is a listed entity and its share price on Friday closed at Rs 148.5 per scrip on BSE, up 0.75 per cent the previous close.
According to an analyst, who does not wish to be named, this is part of the government's disinvestment target but how much the IPO will help to unlock their values in a volatile market is yet to be seen.
"Since the government has not declared any time frame for the listing, this can be considered as in-principle approval, while the listing will happen at a later date when the market will look upward," the analyst said.
In the current fiscal, the government has a disinvestment target of Rs 80,000 crore but has so far raised about Rs 32,300, inclusive of the Rs 5,300 crore offer-for-sale (OFS) of Coal India and Rs 17,000 crore raised through third follow-on offer of CPSE exchange traded funds (ETF).
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