Covid slowed disinvestment, EoIs may be extended: DIPAM Secy

Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM).

New Delhi, (Asian independent) The Centres mega disinvestment plan has been impacted by the ongoing Covid-19 pandemic, making it necessary to extend to some extent the timelines for the submission of expressions of interest (EOIs), which have been issued by the government for selling stake in few public sector companies, said Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM).

Speaking at FICCI’s 17th annual Capital Market Conference, the official said that although virtual modes of communication play a major role, there are several aspects involved in the process, which require physical movement of people and checking of documents. These have come to a halt now, Pandey said.

Strategic disinvestment process generally takes 8-9 months, he said.

“To a lot of extent, Covid has put a brake to this (disinvestment process), as several processes are involved. To some extent, we have to grant extensions to the EoIs that we have issued,” Pandey said.

Among the major PSUs put on the block is oil major BPCL and the deadline for the submission of EoI ends on July 31. The deadline has been postponed twice earlier as well. According to people in the know of things, several global and domestic oil giants have shown interest in the public sector oil major.

The DIPAM Secretary said the government has of late changed the disinvestment policy towards privatisation, as it would bring “real benefits”, including technological enhancement and better corporate management, among others.

Noting several disinvestment plans of the government have not succeeded, the DIPAM Secretary said that going forward the government’s disinvestment plans would be more successful as the Centre has now started to engage with prospective investors and buyers.

“Earlier we were secluded from the investors. We have seen that many of our strategic disinvestments were not succeeding. We now engage with the investors and recently got into the engagement processes prior to EoI, through which we are able to address the concerns of the investors in the EoI,” he said.

Regarding the EoIs sought for Air India, he said the government had restructured the EoI of AI with a “sense of responsibility that we will complete the disinvestment this time”.

He noted that Covid has made the travel market uncertain and while domestic travel has picked up to some extent, international travel has not started at all.

“I think we will have to hold on to it and I would say persist and persevere in these times,” he said.

Pandey also said that the government has now made a change of strategy in terms of disinvestment — it has moved from selling stake in loss making companies to profit making companies.

The official statement comes at a time when the Centre is planning to expand its disinvestment plans and considering to bring two key sectors — banking and insurance — into the ambit of its new disinvestment policy.

A new disinvestment or privatisation policy is in the making and people in the know of things said that a draft cabinet note is being prepared for the same, sources said.

Pandey also said that the government will continue to list those “listable PSUs which are good and compliant to the Sebi’s criteria”.

Talking about the proposed initial public offering for LIC, he said that the process has been set into motion and a “lot of preparation” is underway for it.

He said the IPO will be very good for the economy and also for the insurance giant’s health.