The Cabinet Committee on Economic Affairs (CCEA) may take a call on offloading part of the Government’s shares in two Central Public Sector Enterprises — State Trading Corporation and India Tourism Development Corporation (ITDC) — on Thursday.
The proposal includes divesting 5 per cent stake in ITDC and 1.02 per cent in STC. “This divestment mainly intends to fulfil regulatory requirements,” a senior Government official said. At Wednesday’s closing price of Rs 1,219.10 a share, selling off 42.88 lakh shares of ITDC may fetch over Rs 522 crore. Similarly, at Rs 105.25, selling off around 6.14 lakh shares of STC may fetch Rs 6.45 crore. However, the actual realisation will depend upon how much discount is given.
10% norm
Disinvestment will help these companies meet the norms of minimum public shareholding. The market regulator, the Securities and Exchange Board of India, prescribes that every listed Central Government-owned company must have minimum of 10 per cent public shareholdings. The deadline for meeting this norm is August 8.
Public shareholding means shares owned by others, such as general public, banks, financial institutions and mutual funds. Currently, the Government, as promoter, owns 92.11 per cent stake in ITDC and 91.02 per cent stake in STC, and needs to bring down its holding up to or less than 90 per cent.
At the end of 2012-13 fiscal, the paid-up capital of ITDC stood at Rs 86 crore and earned a net profit of Rs 19 crore. For STC, the paid-up capital stands at Rs 60 crore and net profit at Rs 18 crore for 2012-13 fiscal. Once the proposal is approved by the CCEA, the Empowered Group of Ministers on Disinvestment would decide the floor price for stake sale in the two companies.
The Government plans to mobilise Rs 40,000 crore through disinvestment in the current fiscal. In the first three months, it has raised Rs 825 crore.