The Department of Disinvestment may be asked to consider listing as many as 30 additional Central Public Sector Enterprises (CPSEs) in three years.
Meanwhile, the Government is also likely to allow cash-rich, Government-owned companies to buy small stakes in other smaller Government-owned enterprises, in order to help them fulfil mandatory minimum public shareholding norms.
The move regarding the listing of companies was contained in a note circulated to the Group of Ministers (GoM) which is examining public sector enterprise reforms, a senior Government official said. This group, headed by the Finance Minister P. Chidambaram, held its first meeting on April 23.
The panel of Experts on CPSUs’ reforms, headed by former SAIL Chairman S.K. Roongta, had recommended that at least thirty 30 CPSEs should be listed in the next three years, going up to 50 in the next five years.
According to bsepsu.com, as on March 31, of the total of 260 CPSEs and their subsidiaries, only 50 were listed. Forty six of these were listed on the BSE. These constituted 19 per cent of the total market capitalisation of 5,003 companies listed on the BSE. National Buildings Construction Corporation was the last CPSE that went for listing in 2012.
At present, there are 100 CPSEs which are earning profit in the last 3 years, but still unlisted.
Cross holding
In the mean time, the Department of Disinvestment may allow cash rich CPSEs to help some of the listed CPSEs to fulfil the norm of minimum public share holdings of 10 per cent by August this year. “There are 8-9 listed CPSEs where promoters’ shareholding is as high as 99.33 per cent. Now, the effort would be to facilitate cash rich PSUs to buy stake in companies which need to dilute 2-3 per cent to fulfil minimum public shareholding norms,” the official added.
State Trading Corporation has 91.02 per cent of promoters’ shareholding which mean it will have to dilute 1.03 per cent. ITDC is another such company where Government owns 92.11 per cent which mean 2.11 per cent is to be offloaded.