Govt not going back on privatisation of Air India, BPCL

Agencies
December 27, 2020

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New Delhi, Dec 27: Covid-19 carnage may have slightly pushed back timelines but there is certainly no going back on privatisation of bluechip public sector undertakings like BPCL and Air India as the government feels it has no business to be in business.

The spadework started late last year and 2020 was supposed to be the landmark year in India's history of privatisation with at least three top PSUs — the nation's second-biggest fuel retailer Bharat Petroleum Corporation (BPCL), national carrier Air India and Shipping Corporation of India (SCI) up for sale.

The outbreak of the coronavirus pandemic pushed the timelines into the next fiscal but the government is firm on not going back on its disinvestment plans with Finance Minister Nirmala Sitharaman on more than one occasion emphatically stating that the government will continue to push for stake sales.

Oil Minister Dharmendra Pradhan, whose ministry is the nodal ministry for BPCL, went to the extent of saying that, "the government has no business to be in the business".

In February, Sitharaman set a record disinvestment target of Rs 2.10 lakh crore for the fiscal beginning April but Rs 12,380 crore from minority stake sales in four public sector companies is all that has been garnered so far.

The disinvestment target, like last year, looks almost impossible to achieve. The target was anyway daunting as it was four times that of Rs 50,298 crore raised in 2019-20.

The target of Rs 2.10 lakh crore, includes Rs 1.20 lakh crore from CPSE disinvestments and Rs 90,000 crore from stake sale in state-run financial institutions, including LIC and IDBI.

Government officials expressed confidence in completing BPCL and Air India sale in the next few months.

Privatisation drive

The Department of Investment and Public Asset Management (DIPAM), which manages government stake sale programs, had kicked off the privatisation drive inviting preliminary bids for debt-laden Air India in January. In early March, it invited bids for selling its 53.29 per cent in oil marketing and refining firm BPCL.

But then, India imposed a nationwide lockdown to contain the spread of coronavirus from March 25. The outbreak of the pandemic took its toll on the privatisation drive and the government had to repeatedly extend the deadline for submission of bids for the two companies.

As the year drew to a close, the government said it has received "multiple" preliminary bids for the two companies, but the real test remains with those translating into financial bids after potential investors undertake detailed scrutiny of the companies.

While mining-to-oil conglomerate Vedanta and two global private equity funds -- Apollo Global Management and I Squared Capital-owned Think Gas -- have put in bids for BPCL, salt-to-software conglomerate Tata Group and US-based fund Interups Inc are among the potential buyers of Air India.

Late in 2020, the government invited preliminary bids for the sale of its entire stake in Shipping Corporation of India (SCI) with the hope of completing the transaction in 2021.

With over two dozen companies, including Container Corporation, Cement Corporation, BEML, Pawan Hans, Scooters India and some steel plants of SAIL lined up for strategic sale since 2019, the question remains as to how soon the real privatisation drive starts.

Trailing CPSE shares

With share prices of CPSEs (Central Public Sector Enterprises) trailing compared to private sector peers, the government has put the onus on the top management of CPSEs to improve investor confidence by way of quarterly dividend payout to reward them and engage with them to assuage their concerns, if any.

DIPAM Secretary Tuhin Kanta Pandey had flagged the issue of lagging market valuation of CPSEs saying that between March and November while the Sensex and the Nifty rose by about 50 per cent, the BSE CPSE Index climbed only 19 per cent.

"In general, we have a problem with PSU stock valuation in the market. We must also do atma chintan (introspection)... as to why this is happening. Is it due to something inherently problematic in the way we manage our companies, or is it some issue in the government policy," Pandey had said.

He had also suggested the inclusion of CPSEs' market capitalisation improvement and asset monetisation as parameters in the MoU target they sign with the government.

Improving share price is the need of the time and till privatisation starts, the government would be banking on minority stake sales to meet its disinvestment target.

Revenue pressure

The run rate of disinvestment mop-up has been slow in the first nine months, but then typically, it is the January-March period that sees the conclusion of a spate of deals. The plans to launch the initial public offering of Life Insurance Corporation (LIC) this fiscal is ambitious as the pre-IPO process of the country's largest insurer would take time with technicalities involved in actuarial valuation and valuation of huge real estate assets of the company.

While Air India disinvestment is not likely to conclude by March 2021, the BPCL deal, coupled with privatisation of Shipping Corporation and CONCOR can push disinvestment proceeds to close to Rs 80,000 crore this fiscal. However, that would still be far less than the Rs 2.10 lakh crore earmarked from disinvestment.

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News Network
November 21,2024

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Hamas says the Israeli regime’s sole objective lies in “erasing” the entirety of the Palestinian population from across the Palestinian territories.

Khalil al-Hayya, a ranking official with the Gaza Strip-based Palestinian resistance movement, made the remarks to the Palestinian al-Aqsa TV on Wednesday.

“The occupation targets everyone—it strikes hospitals, civil defense, women, children, and the elderly,” he said, adding that the regime sought to “empty Gaza of its residents, and displace the Palestinian people to fulfill its dreams of building a Zionist Jewish state across all of Palestine.”

The remarks came amid the regime’s October 2023-present war of genocide on the coastal sliver that has so far claimed the lives of nearly 44,000 Palestinians, mostly women and children.

“This unprecedented aggression in modern times evokes scenes from the dark ages of human history, having crossed all red lines and exceeded every expectation of brutality in the modern era,” the Palestinian official lamented.

He also regretted that the regime had added “systematic and dangerous starvation to its aggression, falsely claiming before the world that it allows 250 [aid] trucks into Gaza daily. In reality, the number of trucks is far fewer.”

Hayya, meanwhile, regretted that “scenes of children torn apart, women screaming over their children, and heart-wrenching destruction have failed to stir enough humanity to stop these crimes.”

He decried the United States for vetoing the United Nations Security Council’s resolutions that are aimed at bringing about a potential ceasefire in the war, saying this indicated Washington’s “partnership in the aggression” and a simultaneous siege that the Israeli regime has been enforcing on Gaza.

Addressing Israeli Prime Minister Benjamin Netanyahu, the official asserted that, despite what the Israeli official is after, Hamas would not hand over the regime’s captives “without [the regime’s] stopping the war.”

He called Netanyahu “the main obstacle” in the way of cessation of the aggression, saying the Israeli premier “blocks any progress for political reasons,” and citing his preventing conclusion of a ceasefire agreement in July.

Hayya also warned that the regime sought to expand the war beyond Gaza, but asserted that its goals are “impossible and will never happen.”

“Today, the enemy exposes its true intentions of extermination and displacement, but it will fail,” he stressed.

“The Palestinian people are resilient and will not surrender, as they believe in their humanitarian and political cause. The enemy and its allies will not succeed in achieving their goals. This steadfast people will endure, and the occupation will not prevail against them.”

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News Network
November 14,2024

Bengaluru: Karnataka Deputy Chief Minister D K Shivakumar on Thursday backed Chief Minister Siddaramaiah over his claim that the BJP had offered Rs 50 crore each to 50 Congress MLAs in an attempt to "topple" the state government.

Addressing reporters here, Shivakumar, also the Congress state president, said, “The BJP indeed lured 50 Congress MLAs with Rs 50 crore each.”

He defended Siddaramaiah’s statement and said the Congress MLAs were briefed about the BJP’s alleged 'Operation Lotus', a term used to describe the BJP's attempts to destabilise ruling governments through horse-trading.

“Some of our MLAs informed the Chief Minister about this matter, and he, in turn, shared it with the media,” Shivakumar said.

At an event in Mysuru, Siddaramaiah reiterated the claim that "none of the Congress MLAs had accepted the offer".

He also accused the BJP of filing false cases against him in a bid to "remove him and overthrow his government".

The BJP has yet to respond to the allegations.

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News Network
November 13,2024

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Bengaluru: An estimated overall 10.14 per cent voter turnout was recorded during the first two hours, since the voting began for bypolls to three Assembly segments in Karnataka on Wednesday, election officials said.

The voting began at 7 am and will go on till 6 pm.

More than seven lakh voters are eligible to cast their votes in about 770 polling stations in Shiggaon, Sandur and Channapatna, where a total of 45 candidates are in the fray.

While Channapatna recorded 10.34 per cent voter turnout till 9 am, it was 10.08 per cent in Shiggaon, and 9.99 per cent in Sandur, election officials said.

Voters, including women and elderly were seen queuing up in front of polling booths in these segments.

By-polls for Sandur, Shiggaon, and Channapatna are necessitated, as the seats fell vacant following the election of their respective representatives -- E Tukaram of Congress, former CM Basavaraj Bommai of BJP, and Union Minister H D Kumaraswamy of JD(S) -- to Lok Sabha in May elections.

As many as 31 candidates are in the fray from Channapatna, while Sandur and Shiggaon have six and eight contenders, respectively.

Elaborate security arrangements have been made in the three segments for the smooth conduct of the polls.

The by-polls will witness a straight fight between the ruling Congress and BJP in Sandur and Shiggaon segments, while in Channapatna, JD(S) which is part of the NDA alliance is in contest against the grand old party.

Among the three segments, Channapatna is considered to be a "high profile", where the contest is between C P Yogeeshwara, a five time MLA from the segment and former Minister, who joined the Congress quitting BJP ahead of nomination, and actor-turned -politician Nikhil Kumaraswamy, who is Kumaraswamy’s son and former PM H D Deve Gowda's grandson.

BJP's Bharath Bommai, son of Basavaraj Bommai, is fighting Congress Yasir Ahmed Khan Pathan, who had faced defeat against the former Chief Minister in the 2023 Assembly polls, in Shiggaon.

Bharath Bommai and his father cast their vote at a polling booth in Shiggaon segment.

In Sandur, Bellary MP Tukaram's wife E Annapurna of Congress is contesting from the seat vacated by her husband, against, BJP ST Morcha president Bangaru Hanumanthu, who is considered close to party leader and former mining barron G Janardhan Reddy.

Annapurna, Tukaram and other family members cast their votes at a booth in the segment.

With Nikhil Kumaraswamy and Bharath Bommai contesting, the third generation of Gowda and Bommai families are in the fray in this by-poll. Both their fathers and grandfathers have served as Karnataka's Chief Ministers in the past.

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