The government on Thursday ended its two months of lull on disinvestment plans, as the Cabinet Committee on Economic Affairs gave its nod to off-loading up to 10 per cent of government stake in National Buildings Construction Corporation Ltd (NBCC) through an initial public offer.
The employees and retail investors of the 1960-incorporated entity, which leads in the field of construction, engineering and project management consultancy services, will get a five per cent discount. The divestment decision will lead to NBCC getting listed on exchanges — a paradigm shift for the company whose entire stakes are currently held by the government.
A portion of the shares to be offered for sale through the IPO shall be reserved for the employees of the company. NBCC’s paid-up equity capital is Rs 90 crore (9 crore shares of face value of Rs 10 each).
The paid-up capital and the number of shares may increase in the event of the company issuing bonus shares.
The government has fixed a target of raising Rs 40,000 crore through disinvestment this fiscal, but has so far mopped up only Rs 1,144 crore. This money came from the only disinvestment in this fiscal: in Power Finance Corporation through a follow-on public offer in May.
The disinvestment money is much needed for the government to rein in its fiscal deficit at 4.6 per cent of the GDP. Till June, the government was close to 40 per cent of this target.
The government is working on a list of divestment targets — ONGC, SAIL, OIL India, GAIL, IOC, MMTC, Container Corporation, RITES, BHEL and Neyveli Lignite.
Last fiscal, the government had raised over Rs 22,000 crore against its target of mopping up Rs 40,000 crore. Even then, it was able to bring down fiscal deficit to 4.7 per cent of GDP against 5.1 per cent, projected in revised estimates.
Another decision approved by the CCEA is an upward revision of the cost estimates for the ongoing centrally sponsored scheme of Project Tiger during the Xl plan period from Rs 650 crore to Rs 1,216.86 crore of central assistance.
As for the Cabinet, it decided the setting up of a new company, AGRINDIA, with an initial paid-up capital of Rs 50 crore. The proposed company, under the Department of AGricultural Research and Education, would protect and manage intellectual properties generated in the system.
The Cabinet also decided to allow mobility of faculty and non-faculty personnel to newly established Central Educational Institutions and Scientific Institutions for a period up to 10 years on deputation basis, besides creating non-lapsable Central Pool of Resources for the country’s backward Northeast.
