Sale only to PSU banks, FIs n To fetch Rs 1,000 cr.
The Cabinet Committee on Economic Affairs (CCEA) today approved the sale of 8 per cent government equity in Maruti Udyog Ltd to public sector banks and financial institutions. This could be the first disinvestment of the year.
At present, the government holds a stake of 18.28 per cent in the company. Based on the listed price, the sale is expected to fetch the Centre around Rs 1,100 crore.
In June 2003, the sale of a 27.5 per cent stake in Maruti Udyog through a public offer at Rs 125 per share had fetched the government Rs 993 crore.
This time, the government intends to restrict the sale to public sector banks and financial institutions, using a competitive bidding process, with the market price as the benchmark.
No deadline had been set for the sale, Defence Minister Pranab Mukherjee told reporters after the CCEA meeting. Asked if the Left allies of the government were consulted on the issue, he said, “Maruti Udyog is no longer what it used to be in the 1980s. The government only holds an 18 per cent stake in the company.”
Unlike the sale of the government’s 10 per cent stake in Bharat Heavy Electricals Ltd — on hold due to opposition from the Left parties — the Maruti disinvestment is expected to go through.
This is because the Communist Party of India (Marxist) is open to the sale of residual stake in companies that have already been privatised.
“What will the government do with the residual stake when these companies have already been privatised?” CPI(M) Politburo Member Sitaram Yechury said.
However, in Kolkata, Gurudas Dasgupta of the CPI, who is also the general secretary of the CPI-supported All India Trade Union Congress, said the decision was unwelcome as labour disputes were pending.
The CCEA also approved the appointment of advisers to assist the disinvestment department in the sale.
The proceeds from the sale will be kept with the National Investment Fund (NIF), to be set up shortly. “The unlocking of the amount from the non-strategic investment will mobilise resources to be used by the government in sectors that require attention and priority,” an official release said.
The government is to appoint fund managers for the NIF. The finance ministry plans to use 70 per cent of the income for the NIF corpus and earmark the rest for revitalising public sector companies.