The industry ministry has decided to offload up to 74 per cent of the government stake in 11 public sector companies in an effort to turn around these sick units.
In a note seeking the cabinet approval the ministry assured that while the joint venture partners would be offered up to 74 per cent equity, the rest would be retained by the government to protect the interest of the employees and to exercise control on special resolutions.
All the Left parties criticised the government proposal and claimed it may not lead to the PSUs revival.
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However, the moot question is whether there will be any takers for the government offer?
Unlike the case of private companies, investors have little information on the fundamentals of the PSUs on which they can base their judgement.
More than half of the 11 companies selected for disinvestment have large equity capitals and performance in the last three years cannot be considered as encouraging. The criterion that might be applied to pick up shares, of profitability ratios measured by PAT (profit after tax) as percentage of sales, appears to be the most effective.
This study covers all the 11 PSUs proposed for disinvestment.
As the