Govt of India may sell stakes in several listed railway PSUs to achieve disinvestment target

New Delhi, India (Urban Transport News): The Union Government is planning to sell some of its shares in listed railway public sector undertakings (PSUs) for raising money during this financial year, as reported by three people who are aware of the development. This comes at a time when the Government's disinvestment target for the fiscal year looks increasingly out of reach.

Based on the market conditions, several railway cPSUs like Rail India Technical and Economic Services Ltd (RITES), Indian Railway Construction Ltd (IRCL), and Rail Vikas Nigam Ltd (RVNL) may be among the first to sell shares. However, other listed PSUs like Railtel Corporation of India Ltd (RailTel), Indian Railway Catering and Tourism Corporation Ltd (IRCTC) and Indian Railway Finance Corporation Ltd (IRFC) may explore the possibility according to the sources. With just five months left in the fiscal, the public listing of Life Insurance Corporation of India (LIC) and the offers for sale of some firms have collectively raised just Rs 24,543.67 crore, which is far below the Rs 65,000 crore disinvestment target for FY2022-23.

The Ministry of Railways has asked public sector undertakings under its ambit to consider whether they can sell new shares for raising capital, with the government also selling some of its shares. The move comes after greater freedom to the boards of central public sector undertakings was granted by the cabinet to pursue stake sales.

The 6 railway PSUs went public over the last 3 to 4 years, with the government’s shareholding in them ranging from 67 percent in IRCTC to over 86 percent in IRFC. The government may sell up to 10 percent of its stake via market offers. At current market prices, a 10 percent sale in all 6 PSUs would fetch about Rs 12,000 crore.

The boards of these companies are likely to discuss and finalise the plans soon. However, the timing of such issues would be based on the market conditions, according to the sources. The railway has not yet decided on initiating the listing and divestment of stakes in other PSUS like Konkan Railway Corporation Ltd (KR), Dedicated Freight Corridor Corporation of India (DFCCIL), and Mumbai Rail Vikas Corporation Ltd (MRVC).