In an exclusive revelation, the government is formulating a strategic plan to initiate an Offer for Sale (OFS) for a series of public sector undertakings (PSUs) with the aim of meeting the minimum public shareholding requirement of 25 percent. This proactive measure is slated to encompass no less than six prominent PSUs, including the Indian Railway Finance Corporation (IRFC), Ircon International, Mazagon Dock Shipbuilders Limited (MDL), and NLC India Limited (formerly Neyveli Lignite Corporation Limited). This move underscores the government’s commitment to financial transparency and accountability.
Moreover, this OFS initiative extends to fertiliser PSUs as well, with National Fertilizers Limited (NFL) and Rashtriya Chemicals and Fertilizers Limited (RCF) being reinstated on the agenda. These actions come in the wake of investor apathy towards these ventures, which had previously relegated them to the back burner.
Notably, these PSUs are expected to divest stakes ranging from 5 to 10 percent through the OFS route, further enhancing their compliance with the stipulated public shareholding norms. A senior government official has disclosed that roadshows have already been conducted for MDL and IRCON, with palpable enthusiasm in the markets for defence and fertiliser sectors.
Crucially, a blanket exemption has been extended to some PSUs, allowing them to defer the compliance with the minimum public shareholding requirement until August 2024. The decision to proceed with OFS in the aforementioned PSUs hinges on market dynamics, investor appetite, and the scale of the OFS under consideration.
In case certain PSUs fail to meet the stipulated MPS criteria, the Economic Affairs Department of the Finance Ministry will explore options for an exemption extension before the August deadline. It’s worth noting that three PSUs—Scooters India Limited (SIL), State Trading Corporation of India Limited (STC), and Hindustan Photo Films Manufacturing Company Limited (HPF)—are earmarked for closure and will not be subject to OFS, despite their non-compliance with MPS norms.
Additionally, Minerals and Metals Trading Corporation (MMTC) currently falls short of MPS compliance. If the efforts to facilitate an OFS in MMTC prove unfruitful, the government may consider recommending its closure.
Furthermore, PSUs such as India Tourism Development Corporation (ITDC) and Andrew Yule & Co. Ltd., which do not meet MPS norms, are actively pursuing strategic disinvestment, rendering the OFS route unfeasible for these entities.
Recently, a significant milestone was achieved with SJVN and Rail Vikas Nigam Limited (RVNL) successfully reaching the 25 percent public shareholding threshold, exemplifying the government’s unwavering commitment to regulatory compliance.
In summary, this strategic maneuver underscores the government’s commitment to enhancing transparency and financial compliance in India’s public sector undertakings, ensuring that they adhere to the stipulated minimum public shareholding requirements.
