Government Starts PSU Sell Off With Scooter India
The deliberate stake sale in Scooters India is part of the overall Rs 72,500-crore divestment target to be achieved by the finance ministry for 2017-18
The Narendra Modi-led central government has started off a complete sale of some of the government-owned companies starting with Scooters India. The deliberate stake sale in Scooters India is part of the overall Rs 72,500-crore divestment target to be achieved by the finance ministry for 2017-18.
The company has an integrated automobile plant with designing, developing, manufacturing and marketing a broad range of traditional and non-traditional fuel driven 3-wheelers and the stake sale is likely to attract the attention of major auto companies.
“The government has in-principle decided to disinvest its 100% equity in Scooters India Ltd through the strategic sale with a transfer of management control,” the department of investment and public asset management (DIPAM) said in a statement late on Tuesday.
Scooter India was integrated in 1992 and is a front runner of 3-wheelers. The company is a 9001:2000 and ISO 140001 certified and has its manufacturing plant in Lucknow, Uttar Pradesh. The government had bought Innocenti of Italy after which the company started the commercial production and launched scooters under the name of Vijai Super for domestic and Lambretta for the international market in 1975.
The finance ministry has started inviting bids from various investment bankers for divestment of Central Public Sector Enterprises (CPSE) after identification from the NITI Aayog. The government started the divestment process in April with a 9.2% stake sale in Nalco for Rs 1,204-crore. The government is also selling a 10.2% stake in Hudco which will raise up to Rs 1,225 crore.
The government also has plans to sell equity in more than 20 major valuable companies which include companies such as National Thermal Power Corp, Indian Oil Corp, NHPC, Power Finance Corp, Neyvelli Lignite Corp and Rural Electrification Corp.
Government-owned insurance companies like Oriental Insurance Company Ltd, National Insurance Company Ltd, New India Assurance Company Ltd, United India Insurance Company Ltd, and General Insurance Corporation of India will be listed on the stock exchange of India.
The government has planned a target of raising up to Rs 46,500 crore through small stake sales and Rs 15,000 crore from strategic divestment during 2017-18, to help reduce the fiscal deficit which is estimated at 3.2% of GDP during 2017-18.