Approach for Disinvestment

You may already be aware that on 5th November 2009, Government approved the following action plan for disinvestment in profit making government companies:

1. Already listed profitable CPSEs (not meeting compulsory shareholding of 10%) are to be made compliant by ‘Offer for Sale’ by Government or by the CPSEs through issue of fresh shares or a grouping of both.

2. Unlisted CPSEs with no accumulated losses and having earned net profit in three former consecutive years are to be listed.

3. Follow-on public offers would be assumed taking into consideration the needs for capital investment of CPSE, on a case by case basis, and Government could at the same time or independently offer a portion of its equity shareholding.

4. In all cases of disinvestment, the Government would preserve at least 51% equity and the management control.

5. The Department of Disinvestment is to recognise CPSEs in consultation with respective administrative Ministries and submit proposal to Government in cases needing Offer for Sale of Government equity.

Caution: All cases of disinvestment are to be decided on a case by case basis.

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