The government is planning a new mechanism to fast-track listing of state-owned companies, the aim of which will be to cut through inter-departmental red tape, and reduce the time between identifying companies and taking them to the bourses.
At the business end of such a mechanism could be an empowered group of ministers to give final approvals, similar to the one for strategic sales.
Finance Minister Arun Jaitley announced in his 2017-18 Budget speech that the Centre will come up with a revised mechanism and procedure to ensure “time bound listing of identified CPSEs (central public sector enterprises) on stock exchanges”.
The details of such a mechanism are still being worked out, senior government sources said. They added that such a procedure would have at its top a group of ministers who would be empowered to clear the proposed public sector undertaking (PSU) list after all the groundwork has been laid, including hiring of merchant bankers, roadshows, filing of draft red herring prospectus.
Such a group of ministers, dubbed ‘alternative mechanism’ by the government, already exists for strategic sales. After the first Cabinet approval, the work is done to value the (mostly unlisted) PSUs, find interested buyers and fix the price. Then an empowered group, comprising Jaitley, Transport Minister Nitin Gadkari and the minister heading the concerned ministry whose PSU is being sold, takes a final call.
The same group will also give final approvals for the previously announced listing of the five state-owned general insurers, namely New India Assurance, United India Insurance, Oriental Insurance, National Insurance and General Insurance Corporation of India.
Senior government sources say that either the Jaitley-Gadkari combine or a newly empowered group of ministers will be tasked with overseeing and approving the listing of state-owned companies.
Tackling red tapism
New mechanism for PSU IPOs to be led by empowered group of ministers
Select ministers to oversee and grant final approvals for IPOs of state-owned firms
Current process of identifying, preparing PSUs for listing involves inter-departmental red tape
New mechanism to speed up processes leading up to IPOs
Govt wants all profit-making unlisted PSUs to hit the bourses