Only 4 strategic sale out of 24 PSUs

Wednesday 18th December 2019 05:04 EST
 

Only 4 strategic sale out of 24 PSUs

The national auditor has slammed the government for its inability to wrap up strategic sale in nearly two dozen companies and has also pointed flaws in SUUTI stake sale using the ETF (exchange traded fund) route. The report of the Comptroller and Auditor General (CAG), which was tabled in Parliament, said audit revealed that out of the 24 staterun public sector undertakings approved by the Cabinet for strategic stake sale, only one HPCL-ONGC deal was finalised in 2017-18. “The reply of DIPAM (Department of Investment and Public Asset management) indicated that out of the 24 CPSUs approved for strategic sale, only four CPSEs had been divested up to 2018-19. The target of 24 CPSEs was not even closely achieved. Further efforts on part of DIPAM and concerned administrative ministries as well as effective coordination between them to complete the strategic disinvestment of the remaining CPSEs, were required,” the CAG said in its report. The Centre has now relaunched its bid to accelerate strategic sale and officials said that a political call has been taken that the government will not wait endlessly for bidders to arrive for strategic sale in loss-making PSUs and will suggest closure.

Qatar wealth fund to buy 25% in Adani’s Mumbai power utility biz

Qatar Investment Authority, Qatar’s sovereign wealth fund, has proposed to buy a 25.1 per cent stake in Adani Electricity Mumbai Ltd for around $450 million. A part of Adani Transmission Ltd, AEML distributes power to three million consumers in Mumbai. “Adani Transmission Ltd (ATL), Adani Electricity Mumbai Ltd (AEML) and a subsidiary of Qatar Investment Authority (QIA) have signed definitive agreements for the sale of a 25.1 per cent stake in AEML to QIA and for a shareholder subordinated debt investment by QIA in AEML,” said an exchange filing. “The total QIA investment in AEML will be approximately Rs 3,200 crore,” the filing added. This is the second biggest investment in an Adani group company after France’s Total SA decided to buy a stake in gas distribution company Adani Gas in October. ATL acquired the power generation, transmission and distribution business in Mumbai run by Anil Ambani-led Reliance Energy Ltd after securing regulatory approvals in 2018.

GDP growth may see further fall, Nomura

The GDP growth was recorded at over six year low at 4.5 per cent in Q2FY20. The fall is on account of both global and domestic concerns including decline in consumption demand. Even as the growth recovery is expected to set in soon, Nomura said that the economy may see further downside. In Q4FY20, the GDP is likely to grow at 4.3 per cent amid concerns related to crisis in the overstressed NBFC sector, the global brokerage said in a report. The first quarter of 2020 will see a muted uptick in GDP growth at 4.7 per cent, it added. “Domestic credit conditions remain tight as market concerns in the shadow banking (NBFC banking) have persisted too long,” Sonal Varma, Chief Economist, India and Asia. India may record a GDP growth of 4.9 per cent in 2019, down from 5.3 per cent estimated earlier, Nomura said. Similarly, as against the earlier estimate of 6.3 per cent, GDP may grow at 5.5 per cent in 2020. In 2021, it sees India’s economic growth at 6.5 per cent.

Million-dollar CEO club swells with 22 new entrants in FY19

The economy may be slowing down, but not the entry into the ‘million dollar CEO club’, which saw a record 22 new members in FY19. The number of CEOs earning a million-dollar salary annually surged to 146 from 124 in the previous year — an 18% jump. This is by far the best fiscal for the elite club in the last four years despite the falling rupee. The club with 119 members in FY16 had seen a marginal membership growth till FY18. Among the new entrants to the club, Infosys CEO Salil Parekh received the biggest jump of over 300% in compensation to Rs 17 crore in 2018-19, from about Rs 4 crore in the previous fiscal. Professional CEOs (85 of them) have clearly outpaced promoter CEOs (61), and this gap has only widened over the years. “Hiring a good CEO in India just got tougher as India Inc sees more exit barriers in place now in the form of short-term and long-term compensation,” said EMA Partners regional managing partner (Asia) K Sudarshan.


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