Buoyant after the Balco deal, Govt gets ready to sell off 27 more PSUs

Buoyant after the Balco deal, Govt gets ready to sell off 27 more PSUs
HARISH GUPTA

NEW DELHI, MARCH 2: Riding high on the Balco success, the government is set to vigorously pursue the course of disinvestment and has identified 27 PSUs for handing over to strategic partners.

While Modern Foods was sold to Hindustan Lever last year, Balco was clinched today when Sterlite Industries handed over a cheque of Rs 551.50 crore.

Next on the wish-list before this fiscal year ends are Air India, VSNL, IBP and Hindustan Zinc Ltd. Bids have already been invited for Air India while an expression of interest has been called for IBP. In the case of VSNL, the Cabinet has decided to sell it to a strategic partner with 25 per cent of shares while Hindustan Zinc tops the short-list for selling.

Since only a month is left before this fiscal year ends, the government is keen to sell one of these companies.

There are also suggestions that the government should mop up funds by handing over shares of some refinery and fertilizer units units to financial institutions to meet disinvestment target this year and defer outright sale.Considering the lack of consensus among political parties regarding disinvestment, the process of out-right sale may be deferred until Parliament goes in for a month's recess in April.

However, Disinvestment Minister Arun Shourie is of the view that the process should not be delayed as the Opposition has effectively been put on the mat.

Though the disinvestment commission had recommended 58 PSUs for privatisation, the government has opted only for 27 in the first phase.

The other PSUs on the block are India Tourism Development Corporation which runs 29 hotels, National Fertilizers Limited, STC, MMTC, IPCL, Hindustan Organic Chemicals Limited, Hindustan Insecticides, Indian Airlines, Paradeep Phosphate, Madras Fertilizers, Sponge Iron Limited, Hindustan Cables, Bharat Pumps and Compressors, Bharat Brakes & Volves Ltd, Praga Tools, Nepa Ltd, Jessop & Co., Scooters India and Instrumentation, ITDC Joint Ventures and Hindustan Copper.

While some of them are blue-chip companies, others are sick units. The government hopes to mop up at least Rs 15,000 crore by selling some of these companies to strategic partners.

In the case of A-I, the government has been caught in a bind due to lack of competitive bidding. With L.N. Mittal backing out mid-way, there are only two bidders -- TATA-Singapore and Hinduja-Luftansa combine. The government is disinclined to hand-over A-I to the Hinduja-Luftansa combine since the Hinduja brothers are facing charges in the Bofors case.