For FY21, you expect Rs 90,000 crore to come from financial institutions. First you have IDBI Bank. Will the Centre’s stake (currently valued at Rs 18,000 crore) be offloaded or will Life Insurance Corporation (LIC) of India also offload its stake in the bank (LIC stake is currently valued at Rs 19,700 crore)?
The finance minister has announced the sale of only the Centre’s holdings. We can only talk about our holdings.
How much can the Centre expect from the mega LIC IPO?
When we are doing a Budget Estimate, we are not giving the exact value of each transaction. These are estimates. You have to allow the government time to decide the structure, timing, quantum, and the number of transactions. We have to finalise with the Department of Financial Services (DFS). DFS has to take the lead in the LIC IPO.
For the remainder Rs 1.2 trillion, what is the road map?
A large part of this Rs 1.2 trillion will come by way of privatisation.
Realistically speaking, we think the four big privatisation
transactions — Air India, Bharat Petroleum, Shipping Corporation of India, and Concor — could be concluded in the first half of the next fiscal year. If all goes well, we should have qualified bidders for Air India by March 31. Similarly for BPCL, the expression of interest will be issued in a few days. We would have a pipeline of big-ticket disinvestments when we step into FY21.
Do you see a second wave of privatisation in FY21?
We are moving towards privatisation after a long time. If you look at the Economic Survey, it has actually analysed some of those transactions done during the Vajpayee era, and how well those companies have fared, whether you consider the return on equity, return on capital, sales turnover, profit margins, or you look at the earnings per share. In a sense, there will be a second wave of privatisation.