DIPAM issues fresh norms to speed up listing of profitable PSUs

To fast track listing of profitable public sector units, the Finance Ministry has said that the initial public offer should be launched within 165 days of an agreement from the administrative ministry.

In revised norms and mechanism for time bound listing of state-owned firms, the Department of Investment and Public Asset Management (DIPAM) has spelled out strict timelines for each activity leading to the offer.

It has also proposed to set up inter-ministerial groups led by secretary DIPAM to advise and guide the process for each listing.

To expedite the listing of PSUs, administrative Ministries have been asked to identify eligible companies for listing within one month from the finalisation of audited accounts of the last financial year.

A meeting of the PSU Board will then be convened within the next 15 days to authorise the listing.

Similarly, the guidelines have said the appointment of transaction advisers including merchant bankers and lawyers should be completed within eight weeks from the setting up of the IMG.

“An Empowered Committee (EC) shall be constituted at the level of Administrative Ministry or Department, with the mandate to complete time-bound documentation of the draft red herring prospectus (DRHP),” said the norms.

The DRHP should be filed within 105 days of the initiation of the listing exercise and the final prospectus should be submitted to the market regulator SEBI in another 30 days from that. The move follows Finance Minister Arun Jaitley’s Budget announcement for a revised mechanism for time bound listing of eligible PSUs.

“Listing of Public Sector enterprises will foster greater public accountability and unlock the true value of these companies,” he had said in his Budget speech.

Finance Ministry officials point out the new mechanism was much required as due to various reasons, part from volatile market conditions have delayed listing of PSUs.

For instance, just six PSUs including SJVN Ltd, Coal India Ltd and MOIL have been listed since 2009.

In 2012, it was decided to list another four PSU of which two are yet to be listed. In 2017-18, DIPAM plans to examine over 100 profitable PSUs that can be listed over the next few years and it will be one of the key priorities.

In fact, of the ₹72,500-crore budgeted from disinvestment proceeds next fiscal, as much as ₹46,500 crore is estimated from minority stake sales in PSUs.