Lok Sabha Question No. 560 (UNSTARRED), answered on 2023-07-24
Subject: Disinvestment
Ministry: FINANCE
Asked by: Reddeppa Nallakonda Gari

## GOVERNMENT OF INDIA

## MINISTRY OF FINANCE

## DEPARTMENT OF INVESTMENT AND PUBLIC ASSET MANAGEMENT

## LOK SABHA UNSTARRED QUESTION NO. 560

TO BE ANSWERED ON MONDAY, MONDAY, JULY 24, 2023 SRAVANA 2, 1945(SAKA)

## Disinvestments

## 560. SHRI N. REDDEPPA:

Will the Minister of FINANCE be pleased to state:

- (a) the details of all disinvestments conducted during the last five years;
- (b) the details of the proposed disinvestment for this financial year;
- (c) whether  any  of  the  disinvested  companies  were  profit-making  at  the  time  of disinvestment; and
- (d) if so, the details thereof and if not, the reasons for disinvesting them?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (DR. BHAGWAT KISHANRAO KARAD)

- (a) :  The details  of  disinvestment through Minority  Stake Sale and strategic disinvestment during 2018-19 to 2022 -23 are given at Annexure .
- (b) :  The  Budget  Estimate  for  disinvestment  receipts  in  FY  2023-24  has  been  kept  at Rs.51,000 crore.

Disinvestment is an ongoing process, and execution/completion of specific transactions hinges  upon  market  conditions,  domestic  and  global  economic  outlook,  geopolitical factors, investor interest and administrative feasibility.

The Government, since 2016, has given 'in-principle' approval for strategic disinvestment of 36 cases of PSEs and/or Subsidiaries/ Units/ Joint Ventures of PSEs/ Bank. Out of the 36 cases, 33 cases are being handled by DIPAM and 3 cases are being handled by the respective Administrative Ministry/Department. Out of the 33 cases being

handled  by  DIPAM,  strategic  disinvestment  transactions  have  been  completed  in  10 cases ( 8 transactions are in CPSE to CPSE space while Air India and NINL have been privatized). Of the remaining 23 cases, 5 PSEs are under consideration for closure; 1 case held up due to litigation and 1 case is under Corporate Insolvency Resolution Process (CIRP) in NCLT and 2 transactions found not feasible.  Remaining 14 transactions are at various stages.

In other PSEs, where the Government continues to retain control, disinvestment through minority stake sale is carried out through various SEBI-approved methods such as Initial Public Offer (IPO), Offer for Sale (OFS), Buyback of shares etc. from time to time based on prevailing market conditions and investor interest.

- (c) & (d): Of the 9 CPSEs strategically disinvested during the period 2018-19 to 2022-23, seven CPSEs were profit making at the time of disinvestment. Minority stake sales in various CPSEs were carried out during the period as per SEBI approved methods and norms.

However, profit /loss is not among the relevant criteria for privatization/disinvestment. The policy on strategic disinvestment/privatization is based on the economic principle that Government should discontinue in sectors, where competitive markets have come of age and economic potential of such entities  may  be better  discovered  in  the  hands  of strategic  investor  due  to  various  factors  such  as  infusion  of  capital,  technological upgradation and efficient management practices.

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## Details of Disinvestment conducted during the period 2018-19 to 2022-23

## A. Completed Strategic Disinvestment Transactions

| Year    | CPSE                                                         |
|---------|--------------------------------------------------------------|
| 2018-19 | 1. REC Limited                                               |
| 2018-19 | 2. HSCC (India) Limited                                      |
| 2018-19 | 3. National Projects Construction Corporation Limited (NPCC) |
| 2018-19 | 4. Dredging Corporation of India Limited (DCIL)              |
| 2019-20 | 1. THDC India Limited                                        |
| 2019-20 | 2. North Eastern Electric Power Corporation Limited (NEEPCO) |
| 2019-20 | 3. Kamarajar Port Limited                                    |
| 2021-22 | 1. Air India ^                                               |
| 2022-23 | 1. Neelanchal Ispat Nigam Limited (NINL)                     |

NOTE 1: NINL was a Joint Venture company, in which 4 CPSEs namely MMTC, NMDC, BHEL  and  MECON and  2  State  PSUs  of  Odisha  Government;  namely IPICOL and OMC were share-holders. GOI holds no equity in NINL.

NOTE 2: No strategic disinvestment was carried out 2020-21.

## B. Initial Public Offer (IPO)

| Year    |   Name of the Entity | Name of the Entity                                       |
|---------|----------------------|----------------------------------------------------------|
| 2018-19 |                    1 | MSTC Limited                                             |
| 2018-19 |                    2 | Garden Reach Shipbuilders& Engineers Limited GRSE)       |
|         |                    3 | IRCON (International) Limited                            |
|         |                    4 | RITES Limited                                            |
|         |                    5 | Mishra Dhatu Nigam Limited (MIDHANI)                     |
| 2019-20 |                    1 | Rail Vikas Nigam Limited (RVNL)                          |
| 2019-20 |                    2 | Indian Railways Catering and Tourism Corporation (IRCTC) |
| 2020-21 |                    1 | Mazagon Dock Shipbuilders Limited (MDL)                  |
|         |                    2 | Indian Railway Finance Corporation (IRFC)                |
|         |                    3 | RailTel Corporation of India Limited                     |
| 2022-23 |                    1 | Life Insurance Corporation of India (LICI)               |

NOTE: No IPO was launched during 2020-21

## C. Offer for Sale (OFS) including Employees OFS

| Year    | Name of the Entity                                                 |
|---------|--------------------------------------------------------------------|
| 2018-19 | 1. Coal India Limited (CIL)                                        |
| 2019-20 | 1. RITES Limited                                                   |
| 2020-21 | 1. Hindustan Aeronautics Limited (HAL)                             |
| 2020-21 | 2. Bharat Dynamics Limited (BDL)                                   |
| 2020-21 | 3. Indian Railway Catering and Tourism Corporation Limited (IRCTC) |
| 2020-21 | 4. Steel Authority of India Limited (SAIL)                         |
| 2020-21 | 5. IRCON International Limited                                     |
| 2020-21 | 6. Tata Communications Limited                                     |

|         |   7. | Rail Vikas Nigam Limited (RVNL)                                 |
|---------|------|-----------------------------------------------------------------|
| 2021-22 |    1 | SUTTI (AXIS BANK)                                               |
| 2021-22 |    2 | NMDC Limited                                                    |
| 2021-22 |    3 | Housing& Urban Development Corporation Ltd (HUDCO)              |
| 2021-22 |    4 | Hindustan Copper Limited (HCL)                                  |
| 2022-23 |    1 | Oil and Natural Gas Corporation Limited (ONGC)                  |
| 2022-23 |    2 | Paradeep Phosphate Limited (PPL)                                |
| 2022-23 |    3 | Indian Railway Catering and Tourism Corporation Limited (IRCTC) |
| 2022-23 |    4 | Hindustan Aeronautics Limited (HAL)                             |

## D. Buyback Transactions

| Year    |   Name of the PSE | Name of the PSE                                               |
|---------|-------------------|---------------------------------------------------------------|
| 2018-19 |                 1 | KIOCL Limited                                                 |
| 2018-19 |                 2 | National Aluminum Company Limited (NALCO)                     |
| 2018-19 |                 3 | NLC India Limited                                             |
| 2018-19 |                 4 | Cochin Shipyard Limited (CSL)                                 |
| 2018-19 |                 5 | Bharat Heavy Electricals Limited (BHEL)                       |
| 2018-19 |                 6 | NHPC Limited                                                  |
| 2018-19 |                 7 | Indian Oil Corporation Limited (IOCL)                         |
| 2018-19 |                 8 | Oil &Natural Gas Corporation Limited (ONGC)                   |
| 2018-19 |                 9 | Coal India Limited (CIL)                                      |
| 2018-19 |                10 | NMDC Limited                                                  |
| 2018-19 |                11 | Oil India Limited (OIL)                                       |
| 2019-20 |                 1 | MOIL Limited                                                  |
| 2019-20 |                 2 | Mazagon Dock Shipbuilders Limited (MDL)                       |
| 2019-20 |                 3 | Security Printing &Minting Corporation India Limited (SPMCIL) |

| 2020-21   |   1. | RITES Limited                             |
|-----------|------|-------------------------------------------|
| 2020-21   |    2 | KIOCL Limited                             |
| 2020-21   |    3 | NTPC Limited                              |
|           |    4 | NMDC Limited                              |
|           |    5 | Engineers India Limited (EIL)             |
|           |    6 | National Aluminum Company Limited (NALCO) |
|           |    7 | GAIL (India) Limited                      |
| 2021-22   |    1 | MOIL Limited                              |
| 2022-23   |    1 | GAIL (India) Limited                      |

## E. Exchange Trade Funds

## a)         CPSE ETF*

| Year    | Issue       | Constituents                                                                                                          |
|---------|-------------|-----------------------------------------------------------------------------------------------------------------------|
| 2018-19 | FFO 3 FFO 4 | 1. Bharat Electronics Limited 2. Coal India Limited 3. NBCC (India) Limited 4. SJVN Limited                           |
| 2019-20 | FFO 5 FFO 6 | 6. NTPC Limited 7. Indian Oil Corporation Limited 8. Oil Natural Gas Corporation 9. Power Finance Corporation Limited |

b) Bharat 22 ETF

| Year    | Issue       | Constituents                                                                                                                                                                                                                                                                                                                                                                                          |
|---------|-------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2018-19 | FFO 1 FFO 2 | 1. Axis Bank 2. Bank of Baroda 3. Bharat Electronics Limited 4. Bharat Petroleum Corporation Limited 5. Coal India Limited 6. Engineers India Limited 7. Gail India Limited                                                                                                                                                                                                                           |
| 2019-20 | FFO 3       | 8. Indian Bank 9. Indian Oil Corp Limited 10. ITC Limited 11. Larsen &Toubro Limited 12. National Aluminum Company Limited 13. NBCC (India) Limited 14. NHPC Limited 15. NLC India Limited 16. Oil &Natural Gas Corporation Limited 17. NTPC Limited 18. Power Finance Corporation Limited 19. Power Grid Corporation of India Limited 20. Oil India Limited 21. SJVN Limited 22. State Bank of India |

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