Government plans to divest Rs 11,000 crore worth of stake in PSU general insurance companies to meet the steep disinvestment target of Rs 72,500 crore next fiscal.
Of the total target, Rs 46,500 crore will be mobilised through minority stake sale and Rs 15,000 crore from strategic disinvestment. The goal of Rs 72,500 crore is higher than Rs 45,500 crore the government has estimated to raise in the current fiscal.
“Besides strategic and minority stake sale, Rs 11,000 crore has been budgeted from listing of general insurance companies. The department will make best endeavour to meet the overall Budget target,” Disinvestment Secretary Neeraj Gupta said.
Recently, the Cabinet approved reduction of stake in five state-owned general insurance companies to 75 per cent by listing them on the bourses.
The Cabinet Committee on Economic Affairs, headed by Prime Minister Narendra Modi, gave nod to listing five government-owned general insurance companies — New India Assurance Company, United India Insurance, Oriental Insurance Company, National Insurance Company and General Insurance Corporation of India (GIC).
The government shareholding in these companies will be reduced from 100 per cent to 75 per cent in one or more tranches over a period of time. As for strategic disinvestment, the Department of Investment and Public Asset Management (DIPAM) has already identified companies and initiated process in some cases.
The government has invited bids for consultants and legal advisor for strategic sale of PDIL and NPCC, besides Pawan Hans. As for the National Projects Construction Corporation (NPCC), the government has decided to disinvest 100 per cent of its shareholding through merger with a similarly-placed CPSE.
Similarly, the government has sought applications for engagement of an advisor and a legal advisor for 100 per cent strategic disinvestment of Project Development India Ltd (PDIL) and Hindustan Prefab Ltd (HPL). The last date for sending in application for PDIL and NPCC is February 3 while for HPL, it is February 6.