New Delhi, May 26 (IANS) The Indian government Wednesday gave its nod to the appointment of merchant bankers and intermediaries to ensure smooth handling of disinvestment in state-run enterprises.
The government has targeted revenues of Rs.40,000 crore from disinvestment in public sector undertakings in fiscal 2010-11.
‘The Cabinet Committee on Economic Affairs (CCEA) today (Wednesday)approved the appointment of merchant bankers and other intermediaries to disinvestment transactions involving offer for sale or fresh issue by the company,’ said an official statement.
This, the government felt, would help planning and timing of the public offerings in a manner that they are spread out evenly and avoid bunching as far as possible so as to ensure better response from investors, including retail.
The appointment of merchant bankers and other intermediaries will now be taken up along with the process of seeking CCEA approval for going ahead with the disinvestment in a state-owned company.
‘It is expected that the time saved will be optimally utilized in preparing for the actual transaction and in facilitating the disinvestment process,’ said the statement.
The government diluted a part of its equity in NHPC, NTPC, NMDC and Rural Electrification Corporation in 2009-10.
In the current financial year, Sutlej Jal Vidyut Nigam was the first public sector undertaking (PSU) to hit the capital markets. Some other companies that are expected to come to the market are Engineers India, Steel Authority of India and Coal India.