Tuhin Kanta Pandey, Secretary at the Department of Investment and Public Asset Management (Depam), told TII in an exclusive interview, that the privatization of Neelachal Ispat and Central Electronics can go through during the current quarter, with the sale of BPCL and BEML possibilities by March, along with offers Public early Mega LIC.
He emphasized the annual Disinvestment target should not be seen only as a number to bridge the fiscal deficit but part of a greater agenda to change the public sector and sell non-core assets, given the cost of holding the company’s missing opportunity to make or become obsolete.
Interview Quote: What is your learning from Indian air privatization? The last privatization occurred many years ago and since then we have sold minority pegs.
The eight disinvestment transactions that we do are from the Central PSU to the Central PSU, with the entire process under the control of the government.
Air India is a complex transaction because nothing is there, unlike BEML or shipping company.
Because of the whole process, we come to understand many things better.
In 2019, we change the process so that it can encourage it and take direct views instead of the Ministry of Administration who run the show.
We will further simplify the process because people don’t push things before because they are afraid.
Now, we are more confident, some policies have been resolved, many of the inter-ministers have been set.
Bidder and advisor are also more aware of the process.
This (transaction) will improve the climate for privatization.
What does it mean for other transactions such as BPCL and shipping Corp? Will they move faster? During the current financial year, we are looking to conclude several transactions running parallelly – BPCL, BEML, shipping Corp, Pawan Hans, Neelachal Ispat and Electronics Center.
In the third quarter, we might be able to achieve ISPAT Neoloke and electronics center.
Can you meet the target given that LIC is also proposed to be included? Will you see a list of LICs abroad too? We want to register in the fourth quarter.
There are suggestions for simultaneous lists, but we will include it in India.
This will turn on the Indian stock market.
Money will come from all over the world and domestic money is also important with 35% intended for retail investors.
Do you also prepare pipes for next year? Some transactions will roll over next year.
For example, it will take nine months to one year for strategic sales such as the IDBI Bank.
We need RBI at every step and will talk to them.
We will try and bring an expression of interest in December.
What about general insurance companies that are privatized? The law has been amended and now we will continue after discussing with the Financial Services Department.
This will be part of the pipe next year.
Will Niti Aayog came out with a fresh list as part of a larger agenda for privatization? Yes, Niti Aayog will work in the strategic sector.
They do not have a role in the non-strategic field because they will be privatized or close.
The policy itself states that time will depend on market interests, feasibility and other things.
For example, look at steel.
We have Ispat Neelachal, then we have a Nagarnar factory, which will be underestimated, and then, Rinl.
This is a large steel unit and you need bidder, there must be appetite.
If you open four transactions at a time, it becomes difficult.
There are many PSUS making losses identified by the government for sale.
What is the progress? From the list, eight transactions have been made, four have been closed.
One or two are under litigation.
There are several consulting companies.
One cement corporation unit in Nayagaon will be dropped because there is nothing there.
We will clean the entire list.
We must be very clear that all this large fiscal target is not supported by government equity.
You have reached a 51% limit in many companies, you can’t do anything.
You can’t find it in PowerGrid.
You can’t hear at NTPC.
It handles 50% -60% of your power portfolio.
Who has the capacity to handle this? These are strategic things, which cannot be done.
We have to stay away from the fiscal target and move towards reform.
Do you suggest concluding the Disinvestment target of a fiscal deficit? Yes.
My advice is a very high target fixation just to plug in fiscal deficit, time has come to review this strategy.
We prefer to see the implementation of new PSE policies.
If I can conclude four or five (transactions), see opportunity costs.