Centre eyes stake sale in 21 PSUs as part of divestment strategy

by Nidhi Bhati

Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Pandey is counting on paring government stakes in listed entities to meet the Rs.2.1 trillion divestment target for 2020-21. The government aims to reduce its stakes in 21 listed public-sector undertakings (PSUs) to meet the 25 per cent public shareholding norm, mandated by the Securities and Exchange Board of India (SEBI). Pandey further stated that the government is planning to come up with the initial public offerings of RailTel, IRFC and WAPCOS soon. It also aims to complete the privatisation of Shipping Corporation, Concor, Bharat Earth Movers and Central Electronics before 31 March 2021. However, the DIPAM Secretary added that they are not keen on coming up with more exchange-traded funds (ETF) or offers for sale anytime soon for the same stocks as part of their divestment strategy because a market study has shown that ETFs reduce values of stocks and bring down the worth of initial public offerings (IPOs).

1. https://www.business-standard.com/article/economy-policy/divestment-strategy-govt-to-avoid-etf-ofs-to-protect-stock-value-120101601375_1.html