Disinvestment lull likely after LIC IPO

Some hurdles remain to be crossed for firms in strategic sale pipeline such as Concor, BEML, Shipping Corporation

Even as the LIC IPO is expected to sail through on Monday, helping the Centre meet about a third of its disinvestment target for the year, there is likely to be a lull in the privatisation drive of big-ticket public sector enterprises over the next few months.

While oil marketing major BPCL is finding no takers at this point and the sale process would be rebooted later, the next set of public sector companies in the divestment pipeline will take some months to move forward.

These include IDBI Bank, the Shipping Corporation of India (SCI), the Container Corporation of India Ltd (Concor) and the BEML, along with a couple of others, where restructuring of assets needs to be undertaken and other transition challenges must be overcome before their sale process is kicked off, indicated senior Finance Ministry officials.

“We will restart the BPCL transaction later, but as of now, we expect to issue the preliminary information memorandum for IDBI Bank before Concor,” a senior official at the Department of Investment and Public Asset Management (DIPAM) in the Finance Ministry said.

There are still some issues to be sorted out with the Railways in terms of land leasing arrangements before the sale of the Centre’s 30.8% stake in Concor along with management control will be taken up.  

In the SCI’s case, its head office Shipping House, located right next to the Maharashtra Vidhan Sabha, would have needed the State government’s approval for inclusion in the sale process. It has been decided that the building, along with a training institute it owns in Pune, will be demerged from the SCI before it is hived off.