Government has kick-started the process for strategic disinvestment of its entire 93.74% stake for the listed public sector entity Scooters India by inviting bids for the engagement of a merchant banker-cum-advisor.
The Department of Investment and Public Asset Management (DIPAM) has issued revised RFP (Request for Proposals) by July 21, 2017.
Total disinvestment proceeds during the current financial Year 2017-18 is Rs 7,896.87 crore (as on 10th July, 2017). The Government realised Rs 4153.65 crore in the current fiscal through divestment of strategic holdings and income from management of SUUTI investment.
The Government has ‘in-principle’ decided to disinvest its 100% equity in Scooters India Limited through strategic sale with transfer of management control.
The profile DIPAM is looking at is an advisor from any reputed professional consulting firm, an investment banker or a merchant banker or a financial institution or a bank, for providing advisory services and managing the disinvestment process.
An inter-ministerial group (IMG) will decide the Advisor.
Market regulator SEBI has mandated all listed companies to have at least 25% public holding. The Government also plans to go for disinvestment in Railways subsidiaries – IRCTC, IRCON, RITES, Rail Vikash Nigam Ltd.
The Government is in the process of appointing Registrars for disinvestment of paid up equity of IRCON International Limited, IRCTC and RITES Limited through IPO in the domestic market. Karvy Computershare Pvt Ltd. Link Intime India Pvt and Alankit Assignments Ltd had made presentation to DIPAM on July 14.
DIPAM has already selected SBI Capital Markets, IDBI Capital Markets & Securities and Elara Securities India to advise it on the proposed IPO of RITES.
Disinvestment for 2017-18 has kicked off with Rs 1,200 crore Nalco share sale by selling 9.2% in Nalco. The government has drawn up plans to sell stakes in more than 20 companies, including Indian Oil Corp, National Thermal Power Corp, Rural Electrification Corp, Power Finance Corp, Neyvelli Lignite Corp and NHPC, to raise Rs 72,500 crore during 2017-18.
The government aims to list five state-owned insures—New India Assurance Company Ltd, United India Insurance Company Ltd, Oriental Insurance Company Ltd, National Insurance Company Ltd, and General Insurance Corporation of India.
The Finance Ministry has set a target of Rs 46,500 crore through small stake sales and Rs 15,000 crore from strategic disinvestment during 2017-18.
The finance ministry is planning to execute the disinvestment process as it has to spend more on infrastructure and social schemes while cutting the fiscal deficit to 3.2% of GDP in 2017-18, from 3.5% last year.
Scooters India Limited’s total turnover of the company in Financial Year 2016-17 was Rs 152.10 crore. The net worth of the company as on 31.03.2016 is Rs 98.69 crore. SIL is engaged in developing, manufacturing, marketing of three wheelers and quality engineering products.