Drawing strict timelines for listing of profitable PSUs, the government has mandated launch of initial public offer (IPO) within five-and-half months of a nod from the ministry concerned.
Within two weeks of the Budget announcement of listing all profitable central public sector enterprises, the Department of Investment and Public Asset Management (DIPAM) has issued guidelines detailing the mechanism and procedure for time-bound listing of CPSEs on Stock Exchanges.
All CPSEs having a positive net-worth, no accumulated losses and having earned net profits in three preceding years back-to-back will be listed through divestment of 25 per cent government equity, the guidelines said.
It proposed to set up inter-ministerial groups led by secretary DIPAM to advise and guide the process for each listing.
As per the Public Enterprise Survey 2014-15, there are 157 profit-making CPSEs, of which only 45 are listed currently.
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The profitable unlisted PSUs include Airports Authority of India, Central Warehousing Corporation and ONGC Videsh Ltd.
However, not all profitable CPSEs will be listed.
"Profit making large and medium sized CPSEs -- no point listing small CPSEs -- should list. They should open up for public scrutiny and higher transparency. They should compete and establish themselves for whatever worth they can command in the market," DIPAM Secretary Neeraj Gupta told PTI.
Going by this criteria, there may be up to 50 PSUs that can be listed.
To expedite the listing of CPSEs in a time-bound manner, the guidelines mandated the respective ministries to "draw the list of eligible CPSEs for listing within one month from the finalisation of audited accounts of the last financial year, based on the criteria of a positive net-worth, no accumulated losses and having earned net profits in three preceding years.
A meeting of the PSU Board will then be convened within the next 15 days to authorise the listing and the next 45 days spent in preparation of draft red-herring prospectus (DRHP) as well as appointing auditors and independent directors including a woman director on the board and complying its legal issues like demat of shares.
Thereafter, the DRHP has to be finalised and filed with SEBI within one-and-a-half month.
Considering SEBI nod may come within a month, the guidelines allowed 30 days thereafter for roadshows and marketing of the issue and subsequent opening of IPO.
According to the guidelines, an inter-ministerial group (IMG) led by the DIPAM secretary would be constituted for the appointment of advisers/intermediaries and to guide the process of disinvestment through public offer.
"The process for the appointment of Advisors for the transaction, including Merchant Bankers/BRLMs/Legal Advisors, etc shall be completed within a period not exceeding 8 weeks from the date of constitution of the IMG," it said.
Since 2009, just six PSUs including SJVN Ltd, Coal India Ltd and MOIL have been listed.
In 2012, it was decided to list another four PSUs of which two are yet to be listed.