The government on Monday invited legal advisers on Monday to assist with stake sales in seven state-owned valuable firms, together with Indian Oil house, National Thermal Power house and Steel Authority of Bharat, as a part of plans to lift Rs 72,500 crore from withdrawal in 2017-18.
The other firms listed for share sales ar Rural Electrification house, Power Finance house, Neyvelli Lignite house and NHPC, a government statement aforesaid.
The government plans to divest 15% in NLC, 10% each in NTPC, NHPC, SAIL and PFC, 5% in REC, and 3% in IOC as part of plans to raise more funds from disinvestment during 2017-18, as compared with Rs 45,500 mobilised last year.
The Narendra Modi government wants to make a war-chest to pump in additional cash in infrastructure and social schemes. the capital of India desires immediate investments of at least $1 trillion to build roads, ports, airports and power stations as it seeks to expand its economy and raise living standards. The government hopes private companies will contribute half the amount, but much of this could come from stake sales in blue-chip state firms.
So far the government has struggled to raise enough private money, with at least $10 billion worth of road projects stuck because of a difficulty in obtaining land. Many power projects remain unfinished owing to regulatory delays.
Over the years, big banks have become increasingly unwilling to lend money to finance infrastructure projects. This has led governments to turn to pension and sovereign wealth funds.
The government now holds 90% in NLC, 69.74% in NTPC, 75% in SAIL, 74.50% in NHPC, 67.80% in PFC, 60.64% in REC and 58.28% in IOCL.
The new list of companies is in addition to at least 11 more state-owned funds that will be listed on the bourses this year.
On April 12, the cabinet committee on economic affairs cleared the listing of shares in Rail Vikas Nigam Limited (RVNL), IRCON International Limited, Indian Railway Finance Corporation (IRFC) Ltd, Indian Railway Catering and Tourism Corporation (IRCTC) Ltd, RITES Ltd, Bharat Dynamics Limited (BDL), Garden Reach Shipbuilders & Engineers (GRSE) Ltd, Mazagon Dock Shipbuilders Limited (MDSL), North Eastern Electric Power Corporation (NEEPCO) Ltd, MSTC Ltd and Mishra Dhatu Nigam Ltd.
The listing of these companies will be through the public offer of shares up to 25% of government’s shareholding.
The legal advisers invited for the big-ticket stake sale plan includes Cyril Amarchand, AZB & Partners, S&R Associates, Khaitan & Co, J Sagar, Shardul Amarchand, Luthra & Luthra, Subcontracts, Trilegal, Axon, Crawford, DSK legal, Kanga & Co, Bharucha and SNG & Partners.