SEBI-approved methods for minority disinvestment

Disinvestment time depends on market

The policy of disinvestment of minority stake without transfer of management control is being followed through various SEBI-approved methods such as Initial Public Offer (IPO), Offer for Sale (OFS), Buyback of shares and Exchange Traded Funds (ETFs) offers, parliament was updated on 2 Mar 2020.

Disinvestment is an ongoing process. Timing of disinvestment transaction depends on the prevailing market condition and the investors’ interest, said Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs.

During the current financial year, through the ETF mode, Further Fund Offer (FFO)-5 and FFO-6 of CPSE-ETF yielded Rs.10,000.39 crore and Rs.16,500 crore in July 2019 and January 2020, respectively, parliament was told on 2 Mar 2020.

FFO-2 of Bharat-22 ETF fetched Rs.4,368 crore in October 2019. In aggregate, ETFs have yielded Rs.30,868.39 crore in 2019-20,

At present, Bharat 22 ETF consists of equity of 15 CPSEs, 3 PSU banks and 3 private companies.

The Government net shares in CPSEs included in the Bharat-22 ETF are:

Bharat Electronics Ltd 51.13%;

Bharat Petroleum Corp Ltd 52.98%;

Coal India Ltd 66.14%;

Engineers India Ltd 51.50%;

Gail India Ltd 51.76%;

Indian Oil Corp Ltd 51.50%;

National Aluminium Co Ltd 51.50%;

NBCC (India) Ltd 61.75%;

NHPC Ltd 70.95%;