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August 9, 2001
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Money > Business Headlines > Report August 9, 2001 |
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Going cheap: IA for Rs 730 mn, A-I Rs 2.41 bn, CMC Rs 314 mnS Ravindran The department of divestment has valued the stake being divested by the government in about 13 PSUs at just Rs 39.15 billion. The valuation, proposed in an internal DoD document of May 2001, is based on the net worth of the companies on March 31, 2000. The DoD, for instance has valued the 51 per cent stake which the government is planning to sell in Indian Airlines at only Rs 730 million. On the other hand, it is expecting just Rs 2.41 billion from selling the government's 40 per cent stake in Air-India. The net worth of Air-India was Rs 4.02 billion for the year ended March 2000 while that of Indian Airlines was Rs 1.42 billion. At present, the government holds 100 per cent of the equity in both airlines. The DoD has, however, arrived at much better valuations for two other PSUs-the telecom behemoth Videsh Sanchar Nigam Ltd and petrochemicals major IPCL. It has a 53 per cent stake in VSNL and plans to offload another 25 per cent. This has been valued at Rs 15.43 billion on the basis of the company's net worth of Rs 61.74 billion. The government, which holds 59.95 per cent in IPCL is in the process of diluting its stake by another 25 per cent, which has been valued at Rs 7.40 billion. Interestingly, the department has advised the government to exit IT and telecom companies. "There is a bubble in IT and telecom shares and these must be sold early. Consumers in these sectors would be protected by the two-tier regulatory sector already in place-hence taxpayers' money need not be locked up in the volatile markets," the DoD document says. The divestment in all the four companies-Indian Airlines, Air-India, IPCL and VSNL- was initially scheduled for the current fiscal. But whether divestment in Indian Airlines will go through in the current fiscal is unclear as the government will now have to go in for a fresh round of bidding following the disqualification of the Videocon and Hinduja groups in the earlier round. Divestment is expected to proceed as scheduled in the other three companies. Another significant revelation is that the DoD is expecting only Rs 74 million from the proposed divestment of a 51 per cent government stake in Hindustan Insecticides. Similarly, it expects only Rs 314 million for selling 57.31 per cent in CMC. The DoD has, however, projected a realisation of Rs 2.71 billion for selling a 26 per cent stake in Hindustan Zinc and Rs 7.08 billion for selling 51 per cent in National Fertilisers. Powered by YOU MAY ALSO WANT TO READ:
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