Privatisation of PSUs is taking a back seat as the government delinks disinvestment with the fiscal management process. Secretary, Department of Investment and Public Asset Management, Tuhin Kanta Pandey speaks with Dipak Mondal and Monika Yadav, giving more clarity on the government stand on privatisation. Excerpts:Is the government having a rethink on privatisation?There is no rethink on privatisation. There are ongoing transactions. But what we have changed is we are no longer treating disinvestment as a fiscal tool, where you’re using disinvestment proceeds as fiscal resources. Disinvestment is only one of the sources for fiscal resource mobilisation. There are others like dividends (from CPSEs) and asset monetisation (some of which comes to the consolidated fund).So, what we are trying, even resource-wise, is not really to just focus on disinvestment. Disinvestment actually is a strategy that is subsumed into public asset management. And the public asset management should not be driven only by disinvestment. A large number of public sector companies are listed entities and they have to move with the market, market expectation and keep in mind the interest of other shareholders, apart from the government. So, disinvestment alone cannot be a strategy. We have to keep in mind the capex and growth needs of these firms from other shareholders’ viewpoint.So, privatisation is not off the table?Yes, it is not off the table, but it is not our single-minded focus as privatisation is essentially a slow process. Whenever you have a change in management control, you have to go through a strategic disinvestment process — there has to be bidding, there will be other obstacles. Our experience also shows it is not a very straightforward process. Every investment will have its own peculiarities. So, privatisation is not a primary thing for us now.So, what is the status of privatisation of banks and non-life insurance firms?I think that has been clarified by us on several occasions earlier as well. Though it is the Department of Financial Services that has to ultimately propel the process, I don’t think they are likely in the near future because even legislations have not been finalised.So, which are the PSUs that are currently undergoing the disinvestment process?At the moment, our focus is on some of the EoIs that are already in the pipeline, like IDBI (Bank), SCI (Shipping Corporation of India) and BEML. Wherever there is already a progress, our focus will be to try and take them to a logical culmination.What is the status on CONCOR disinvestment?We haven’t even launched the EoI, it doesn’t look likely in near future. BPCL is another firm that keeps coming up.On BPCL, we did go through the first iteration, which didn’t succeed. I think the petroleum minister Hardeep Singh Puri has also made an announcement thereafter. (Puri has said BPCL is no longer going for privatisation).This year, the government has budgeted for Rs 50,000 crore proceeds from disinvestment. Does it take into account the disinvestment of IDBI Bank?The figure Rs 50,000 crore is a miscellaneous (non-debt) capital and isn’t purely disinvestment. It contains receipts from asset monetisation to the extent they come to the consolidated fund.RBI recently submitted the fit and proper report for IDBI Bank. What next?Now, the due diligence process by the bidders will take place. There are two types of due diligence — one on the bidders, and that process is over. Now bidders will do their due diligence on the bank. The bidders will be taken to the virtual data room, where they would have a granular look of the documents and other things, which are not public. These bidders will be signing a nondisclosure undertaking. We will give the bidders access to virtual data room in early August. After that, the financial bids will take place.So, there is more than one bidder?There were always more than one (bidder). You don’t do it with one just bidder.When can we see further divestment in LIC?LIC has two intermediate dates. One is reaching 25% public shareholding in 10-year period. And another is 10% in five years. So, within that timeline, we will have the opportunities to offload some shares. But when or how it is done are something we don’t discuss.Last time you had said that the next round of PSU IPOs will come from the renewable arms of government-owned power companies. Are there any in the pipeline?NTPC Green IPO will happen in the current fiscal.Is there any timeline for exit from HZL and ITC?No, there is no timeline except that in HZL, we are looking for it to launch some of the tranches. Many things have happened between the government (which holds 29.54%) and the promoter (Vedanta Ltd) in the past, which led to not so palatable things for the market. But hopefully, we can move forward now. On ITC, we have no plans to exit. No plans at all.
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