Selection of PSUs for listing in the works to unlock value
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Synopsis
National Seeds Corporation and Central Warehousing Corporation could be among the first set of candidates for listing, as per preliminary discussions, according to the people. Meanwhile, the proposed listing of ECGC, which has an 85% share in India's export credit insurance market, is being expedited, they said. There are 170 unlisted non-financial central public sector enterprises (CPSEs), according to the Department of Investment and Public Asset Management (DIPAM) data.
However, those in certain strategic sectors, including atomic energy, space and defence, could be left out of the process, said people in the know. "The idea is to explore the feasibility of listing more CPSEs and to prepare a road map for it," one of the persons told ET on condition of anonymity. "Which of the companies should be listed and over what period - these issues have to be deliberated on. Preliminary discussions have started and final decisions will be taken in due course."
The plan is part of the broader efforts by the government to boost value creation in listed companies and unlock the value of its unlisted ones, the person said. Listing of state-run companies is also expected to improve their corporate governance and sharpen their competitive edge, said officials.
The plan comes amid realisation that regular strategic sales of companies are hard to push through (there was no strategic divestment in 2023-24, for instance) due to factors beyond the government's control, including market fluctuations, external headwinds and protracted litigations. However, minority stake disinvestments will continue, the people said.
The "value creation" strategy has started to pay off in the form of elevated profitability and market capitalisation of firms in recent years, after a fresh government push to deepen CPSEs' engagement with market participants, bolster corporate governance and offer regular dividends to shareholders. It has substantially improved the dividend flows from non-financial CPSEs, which exceeded the budget estimates by a wide margin for a third straight year in 2023-24.
The ongoing strategic sale process involving eight companies, including IDBI Bank, NMDC Steel and Shipping Corporation of India, has gone past the initial expression of interest (EoI) stage, while five others are still in the EoI stage.
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