Defence PSU disinvestment: Govt to sell stake in BEML, Garden Reach Shipbuilders, Mishra Dhatu

On Monday, the Rajya Sabha was informed regarding the plans of the government to disinvest its stake in defence public sector undertakings (PSUs) BEML Ltd, Garden Reach Shipbuilders & Engineers Ltd and Mishra Dhatu Nigam Ltd. Welcoming the move, Mr. Tribhuvan Darbari, MD & CEO, Texmaco Defence Systems Private Limited and Chief Executive (Corporate Business), Texmaco Rail & Engineering said, “Disinvestments in India is primarily motivated by the optimization of resources to deliver maximum returns and that’s why the present government has taken so many bold decision regarding the disinvestment of PSUs.” Mr. Tribhuvan Darbari further added, “Currently, the government of India has around Rs. 2 lakh crores locked up in PSUs. Disinvestment of the government stakes in these companies, thus, it far too significant in the Indian economy.”

According to the article published on the website of Business Today, The government has categorized central public sector undertakings (CPSUs) into strategic and non-strategic sectors. While it plans to privatize or shut down CPSUs in non-strategic sectors, there will be bare minimum presence of public sector enterprises in strategic sectors, as per the government’s strategic disinvestment policy.

“Defence Public Sector Undertakings (DPSUs) set for disinvestment are BEML Ltd, Garden Reach Shipbuilders & Engineers Limited (GRSE) and Mishra Dhatu Nigam Limited (MIDHANI),” Minister of State for Defence Shripad Naik said in a written reply to a question in the Upper House.
Minister of State for Defence Shripad Naik further said, “Policy of disinvestment of minority stake without transfer of management control is being followed for priority sector including defence CPSUs to unlock value, promote public ownership, to meet the minimum public shareholding norms of SEBI and for ensuring higher degree of accountability”.

Business Today further mentions that while BEML is present in defence and aerospace, mining and construction, and rail and metro businesses, GRSE primarily caters to the shipbuilding requirements of the Indian Navy and the Indian Coast Guard. MIDHANI produces super alloys, special steel, armour products, among others.

Mr. TS Darbari said that Union Minister of State for Finance Shri Anurag Singh Thakur has already stated that the Centre is taking up disinvestment of only the loss-making public sector enterprises. Mr. TS Darbari further stated that in case there is any disinformation regarding disinvestment in any particular PSU, the Centre should try to clarify on doubts of the stakeholders from time to time.

Defence, along with atomic energy and space, is classified as one of the strategic sectors as per the Centre’s disinvestment policy. The government has set a target of raising Rs 1.75 lakh crore from disinvestment in 2021-22.

Sources:

Business Standard: Govt set to divest stake in defence PSUs Garden Reach, Mishra Dhatu

PSU Watch: Defence PSU disinvestment: Shripad Naik releases first list