Divestment has emerged as a priority for the government following a moderation in direct tax collections.
The Indian government is accelerating its sale of minority stakes in state-owned companies, including a significant offer for sale (OFS) in Life Insurance Corporation of India (LIC) expected "very soon," to meet its 80,000 crore mobilisation target and reduce its holdings to 75 per cent in most listed PSUs by year-end.
India's Central government is likely to see its fertiliser subsidy bill double to a record 3.4 trillion in FY27, up from the Budget estimate of 1.7 trillion, due to surging global fertiliser prices exacerbated by the West Asia war. This significant increase, coupled with revenue losses from excise duty cuts for oil-marketing companies, is straining the government's fiscal space, though capital expenditure plans remain unchanged.
The government on Friday received financial bids for the strategic disinvestment of IDBI Bank, the Department of Investment and Public Asset Management (Dipam) said in an official statement on X.
The guidelines for strategic disinvestment were issued on Monday itself when Finance Minister Arun Jaitley presented the Union Budget for 2016-17.
India's privatisation push, once projected as a cornerstone of economic reform, has suffered another setback, with the Centre set to call off the IDBI Bank stake sale, highlighting the political and structural constraints shaping the country's disinvestment policy, experts say.
Ahead of the Budget, the government has achieved almost half the divestment target of Rs 65,000 crore. FY23 divestment receipts are unlikely to be anywhere close to the budgeted target.
The new government that presents the full Budget for 2024-2025 in July should be ready to restructure the way divestment is managed and implemented, proposes A K Bhattacharya.
'Global uncertainty is something which definitely occupies the minds of officials when we are preparing for the Budget.'
New Delhi will substantially reduce tariffs on industrial and agricultural goods while continuing to protect sensitive sectors. Tariffs on some agricultural products that are not traditionally considered sensitive will be brought down to zero, while in the case of relatively sensitive items, duties will be reduced in a graded manner and quotas will be imposed.
'These children possess catastrophically low birth weights -- often 1.4 kgs or less. Such extremely low birth weight results in profoundly compromised neo-natal immunity.' 'The escalation to 97 deaths in three months precipitated contemporary attention precisely because this magnitude concentrates the humanitarian emergency, rendering it impossible for the administrative machinery to ignore.'
But selectively, with regulatory scrutiny and special approval, points out Tamal Bandyopadhyay.
The Divestment Department in the Finance Ministry has invited Request for Proposals for book running lead managers for the issues.
'We now look at divestment as an opportunity for maximising the value of public assets, not necessarily as a short-term resource-raising measure.'
Other companies which are on the block include NMDC, NALCO and IOC.
Balmer Lawrie & Company, whose 61.97 per cent stake is slated to be divested by the Centre, is unlikely to be sold off during the current fiscal.
With general elections on the horizon, the government's privatisation bandwagon has almost but stalled as a government wary of being accused of selling family silver opts for minority stake sales on stock exchanges over outright privatisation. The result -- the divestment target for current fiscal year is again likely to be missed. Big ticket privatisation plans such as that of Bharat Petroleum Corporation Ltd (BPCL), Shipping Corporation of India (SCI) and CONCOR are already on the backburner and analysts feel meaningful privatisation can happen only after April/May general elections.
The divestment department has lined up a host of companies.
The Centre could further moderate its divestment target for 2024-25 (FY25), as it does not expect large receipts from asset sales - except some ongoing strategic ones, including IDBI Bank, which could spill over into next financial year. Also, it may drastically reduce its FY24 divestment target of Rs 51,000 crore. "We are still evaluating the Budget estimates for FY25. "New big-ticket asset sales are unlikely.
Seasoned bureaucrat and a stickler for rules Finance Secretary Tuhin Kanta Pandey will be at the helm of capital market regulator, Securities and Exchange Board of India (SEBI), for three years. The 1987-batch Odisha-cadre Indian Administrative Service (IAS) officer, Pandey, would replace Madhabi Puri Buch, whose three-year term ends on Friday.
'Nearly 10 million people will benefit from the increase in the rebate limit for those earning up to Rs 12 lakh.' 'We expect all that money will come back into the economy in either savings, consumption, or investments.'
The government has appointed 10 merchant bankers including Goldman Sachs (India) Securities, Citigroup Global Markets India, and Nomura Financial Advisory and Securities India to manage the mega initial public offering of country's largest insurer LIC. Other selected bankers include SBI Capital Market, JM Financial, Axis Capital, BofA Securities, JP Morgan India, ICICI Securities, and Kotak Mahindra Capital Co Ltd, a circular on the divestment department website said. "Government has finalised the book running lead managers and some other advisors for the IPO of LIC," DIPAM Secretary Tuhin Kanta Pandey tweeted. The divestment department had invited applications for the appointment of merchant bankers on July 15.
The US Supreme Court has upheld a law requiring TikTok's China-based parent company to divest from the app, paving the way for the popular platform to be banned from the US starting Sunday. The court's decision was unanimous, with the justices citing national security concerns related to TikTok's data collection practices and relationship with a foreign adversary. While existing users may still access the app, new users will be unable to download it and updates will no longer be available. The decision comes as the Biden administration prepares to hand over the reins to the incoming Trump administration, which is expected to review the situation before making a final determination on TikTok's fate.
This will be the first full-year Budget of the BJP-led National Democratic Alliance government since it came to power for a third consecutive term in July last year.
US President Donald Trump has signed an executive order extending the operations of TikTok, the Chinese-controlled video-sharing platform, by 75 days. Trump intends to pursue a resolution that protects national security while preserving the platform used by 170 million Americans. The order instructs the attorney general to refrain from enforcing a law that would have forced TikTok's parent company ByteDance to divest from the app or face a ban from US app stores. Trump cited the national security concerns posed by TikTok and the need to review sensitive intelligence related to these concerns. He also emphasized the importance of finding a resolution that protects national security without abruptly shutting down the platform.
After the government sought Parliament's nod for a second batch of supplementary demand for grants that will cause a hit of Rs 2.99 trillion to the exchequer, doubts suddenly arose about the government's ability to meet the Budget projections of reining in its fiscal deficit at 6.8 per cent of gross domestic product (GDP), or Rs 15.06 trillion, for the current financial year. Till now, many were of the opinion that the government would succeed in checking the deficit at a much lower figure than what was given in the Budget Estimates (BE). The government had sought Parliament's approval to spend Rs 3.74 trillion extra, but Rs 74,517.01 crore will be matched by equal savings on other heads.
Eight investment banks including HSBC and India's ICICI Securities and SBI Capital have submitted bids to manage a 10-per cent stake divestment in state-owned Coal India.
Union Finance Minister Nirmala Sitharaman, along with her team of bureaucrats, delved into the fine print of the 2024-25 Budget documents in a press conference, detailing the government's road map on bringing down the debt-to-GDP ratio and bold tax measures.
If Beijing succeeds in this multipronged effort to challenge the current dominant power, it will have not just economic but political and security consequences. There is no let-up in the South China Sea nor any de-escalation moves on the India-China border. This portends to ominous signalling from Beijing, observes China expert Srikanth Kondapalli.
The Union Cabinet has cleared disinvestment of the country's largest insurer LIC and a panel headed by the finance minister will now decide on the quantum of stake dilution, a senior official said on Monday. The Department of Investment and Public Asset Management (DIPAM) had in January appointed actuarial firm Milliman Advisors LLP India to assess the embedded value of LIC ahead of the IPO (initial public offering), which is touted to be the biggest public issue in Indian corporate history. The Budget amendments to the LIC Act has been notified and the actuarial firm is expected to finalise the embedded value of the life insurer. Under the embedded value method, the insurance company's present value of future profit is also included in its present net asset value.
Expects to raise Rs 9,300 crore from Indian Oil share sale on Monday
'We are in a position to start due diligence and private data room access shortly.'
The government is planning to introduce legislative changes to the Foreign Exchange Management Act (Fema) regulations, with a focus on easing the pathway for inflows from a foreign portfolio investor to transition seamlessly into foreign direct investments (FDI) once the FPI surpasses the 10 per cent ownership threshold in a company. This move stems from multiple requests by foreign investors seeking to streamline the reporting requirements that arise when their stakes in Indian firms cross the 10 per cent mark.
A chunk of divestment till now has come from follow-on offerings in the Centre's two ETFs, Bharat-22 and CPSE. Now, there will be initial public offerings of Mazagon Docks, rail companies RVNL and IRFC and MSTC.
Using buyback as a divestment tool is not new, the amount raised this year is phenomenally high.
He said any decision regarding divestment of BHEL has to be taken by the board of the company.
An official said the government is preparing the financial statements and getting the data room ready for the sales, suggesting that such aspects take time.
Officials said there had been no official word or indication from the top yet. The expectation from officials is to do what they can, but it is understood that all fiscal and budgetary targets don't matter anymore.
Presently, the list that we have of profit-making PSUs for divestment is based on financial numbers from 20007-08.
