The Cabinet Committee on Economic Affairs has approved the listing of six Central Public Sector Enterprises (CPSE) on the stock exchange through an initial public offering (IPO) and one Public Sector Undertaking (PSU) to issue follow-on public offer (FPO).
“Seven PSUs of the government of India will be listed on the National Stock Exchange through the IPO/ FPO route to unlock their potential to enhance their value and encourage investor participation,” Union Minister Ravi Shankar Prasad said on Friday.
The seven PSUs are Telecommunication Consultants (India) Ltd, RailTel Corporation India Ltd, National Seed Corporation India Ltd, Tehri Hydro Development Corporation Ltd, Water and Power Consultancy Services (India) Ltd, FCI Aravali Gypsum and Minerals (India) Ltd, and Kudremukh Iron Ore Company Ltd (KIOCL).
All PSUs will be listed through the IPO route except KIOCL, which will come out with an FPO.
“The Cabinet has taken a very effective step towards reforms. Trade in shares of PSUs will help find its correct value. This is a new start,” Prasad said.
Further, the Cabinet has empowered Alternative Mechanism comprising Finance Minister, Minister of Road Transport & Shipping and the minister of concerned administrative ministry to decide on the extent, mode of disinvestment, pricing, time, etc of the listed CPSEs.
Besides, the scope of eligibility criteria for listing of CPSEs has been expanded. CPSEs with positive net worth and net profit in any of the immediately three preceding financial years will be eligible for listing on the stock exchange, an official statement said.
In Union Budget 2018-19, Finance Minister Arun Jaitley had proposed the divestment target for the current fiscal to be Rs 80,000 crore. He had also said the government plans to list 14 CPSEs, including two insurance companies, on the stock exchanges.