Completion of disinvestment in 10 PSUs to depend on market: Government

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Even as it plans to sell stake in 10 PSUs, including NTPC, Oil India and NALCO, within three years, the government has informed merchant bankers that the completion of the entire process would actually depend on market conditions.

The Department of Disinvestment is in the process of appointing merchant bankers for stake sale in 10 state-owned companies — Oil India, Container Corp, NMDC, MMTC, ITDC, NTPC, Engineers India, BEL, Nalco and Hindustan Copper. The stake sale could fetch about Rs. 20,000 crore to the exchequer.

“The market and other related conditions will determine transaction completion time,” DoD has told the merchant bankers to their query whether all the transactions would be completed in three years.

The 10 companies have been divided into two baskets. DoD had earlier this month issued two RFPs for selecting merchant bankers. The ones selected will handle five disinvestments at one go.

“The Government of India seeks to appoint for a period up to three years qualified merchant bankers for advising the Government, to disinvest a part of the paid up equity share capital in each of the public sector companies, through the ‘Offer for Sale’ of shares by promoters,” DoD said while inviting proposals from bankers.

The DoD would appoint four merchant bankers for each basket.

While applying for the job, the merchant bankers have to certify that they are not advising or acting on behalf of any other person or entity which is engaged in the same line of business as that of each of the Company constituting the basket, in respect of any transaction of same nature.

Further, they would also have to certify that they would “keep the Government/CPSE informed of any mandate/contracts entered into, to advise or act on behalf of or associate ourselves with, any other person or entity which is engaged in the same line of business in respect of each company constituting the basket being disinvested…”