The government is busy giving public sector units (PSUs) a crash course on how they can improve visibility and be more investor-savvy after disinvestment, as it plans to raise Rs 40,000 crore this year from share sales in these state-owned companies.
To facilitate the same, the Standing Conference of Public Enterprises (SCOPE) yesterday organised an interactive session of top managers of public sector enterprises (PSEs), in which the government has divested its stake or plans to do so, with Disinvestment Secretary Sumit Bose. Bose said the feedback from investors was of tremendous value, as it encouraged managements to perform efficiently and introspect for improving their brand value. The government is clearly concerned about the poor retail response to its recent offerings.
S Pradhan, additional secretary, department of disinvestment, said: ‘‘The government has kept 35 per cent for retail investors. However, the response has not been satisfactory and there is need to take initiatives to increase retail participation.’’
The meeting was attended by 40 CEOs, senior executives of PSEs, SCOPE said in a statement. Scope is an apex body of central public sector firms.“PSEs, which have gone through the process of disinvestment, have emerged more visible and stronger,” said Bose. He said the disinvestment proceeds in the National Investment Fund (NIF) were being utilised in meeting capital expenditure requirement because of adverse impact of global financial crisis.
SCOPE Director General U D Choubey said, “PSEs demonstrate high ethical values, as they have system-oriented corporate governance and regulations. There are large number of checks and balances, together with mandatory provisions such as CAG, Board Audit Committees, which keep them away from unethical practices.”
The government has already mopped up over Rs 1,000 crore by divesting stake in Satluj Jal Vidyut Nigam, and around Rs 1,000 crore through Engineers India’s follow-on public offer.
More From This Section
The government is also likely to divest its stake in Coal India, ONGC, IOC, SAIL, MMTC, Hindustan Copper and Power Grid this financial year. Last year, it had raised Rs 25,000 crore through stake sale in Oil India, NMDC, REC and NTPC.
Interestingly, 45 listed PSEs, with a market capitalisation of Rs 15,00,000 crore, account for 25 per cent of the total market capitalisation of listed companies. Together, they have a networth of Rs 5,88,217 crore and reserves of Rs 5,65,000 crore.
SCOPE had asked the government to reduce the strength of independent directors to 33 per cent, as there was shortage of quality independent directors and it made the board of directors unwieldy, said SCOPE Chairman Arup Roy Choudhury.
SCOPE will provide a platform for brainstorming on issues related to the disinvestment process. Bose said more and more brain storming sessions and investors meet would be held in collaboration with SCOPE.