In the year 2024, the Department of Investment and Public Asset Management (DIPAM) continued its focus on value creation for investors, strategic disinvestment, and efficient financial planning.
A key highlight in 2024 was the continued emphasis on value creation in Central Public Sector Enterprises (CPSEs). Since the introduction of the New PSE Policy in January 2021, the NSE CPSE and BSE CPSE Indices have demonstrated remarkable growth, showcasing returns of 182.36% and 146.92%, respectively, as of November 2024.
DIPAM successfully launched the Initial Public Offerings (IPOs) for key entities, including the Indian Renewable Energy Development Agency (IREDA) and MSTC Limited, which were met with strong investor response.
The DIPAM also used the Offer for Sale (OFS) route to create value for CPSEs like HAL, Coal India Limited, RVNL, SJVN Limited, and HUDCO, with the OFS collectively yielding Rs. 13,728 crore. The stocks involved continued to exhibit positive momentum post-OFS, reflecting investor confidence and contributing to capital gains.
DIPAM has upheld its Consistent Dividend Policy, with total dividend receipts from CPSEs in FY 2023-24 reaching Rs. 67,895 crore, significantly exceeding the Revised Estimates. As of 5th December, 2024, the Government has realised Rs. 30,284 crore as dividend receipts from CPSEs for the current fiscal year.
In step with the evolution in the capital market conditions, regulatory & sectoral changes, among others, DIPAM had issued revised Guidelines on Capital Restructuring of CPSEs in 2024. These guidelines supersede the earlier guidelines issued by the DIPAM in May, 2016.
Following are some of the major achievements of the Department of Investment and Public Asset Management (DIPAM), Ministry of Finance, in 2024:
GOVERNMENT IS FOLLOWING A HOLISTIC PUBLIC ASSET MANAGEMENT STRATEGY WITH REGARD TO CPSEs
- Performance enhancement of CPSEs through alignment of management incentives.
- Encouraging CPSEs to pay consistent dividend to its shareholders while retaining sufficient resources for their CAPEX and growth.
- Every CPSE is being driven to create value for itself, its employees, shareholders, & the broader economy
- Ensuring CAPEX and growth of Enterprises by undertaking investment of more than Rs. 3 lakh crore annually.
- Calibrated disinvestment strategy is being followed through listing/IPO of companies & gradual dilution of minority stake through stock market, aligned with interest of minority shareholders.
- The CPSE indices have out-performed the benchmark indices in the stock market during the past 3 years (07.10.2021 to 07.10.2024). Similarly, total M- Cap of listed CPSEs has grown by nearly 3.61x in last three years from Rs 12.10 lakh crore (31.03.2021) to Rs 43.65 lakh crore (as on 11.10.2024).
DURING THE CURRENT FY, DIPAM HAS CARRIED OUT OFFER FOR SALE OF GENERAL INSURANCE CORPORATION OF INDIA.
- The GIC OFS was launched on 04.09.2024 in non-retail category.
- It was subscribed by 108.49% on 'T Day'.
- Due to oversubscription, the Green Shoe option was exercised.
- GIC OFS was successfully completed on 05.09.2024.
- The OFS was very well received by institutional investors.
- Post OFS, Gol shareholding in GIC stands at 82.40%.
- It was the first ever OFS transaction wherein the employees could participate in the main OFS by bidding on T+1 day, along with the retail category, under the new category of "Employee".
- Gol realized total of Rs. 2,345.55 crore (approx.) by divesting 3.39% of the total paid up equity capital of GIC out of Gol shareholding.
OFFER FOR SALE (OFS) AND LISTING
COCHIN SHIPYARD LIMITED (CSL):
- OFS for disinvestment of 2.5% of paid-up equity of CSL, out of Gol stake of 72.86%, was launched on 16.10.2024. The green shoe option was also exercised of paid-up capital of CSL over and above base issue size.
- Government realised an amount of Rs 2,015.32 crore from the transaction.
HINDUSTAN ZINC LIMITED (HZL):
- OFS for disinvestment of base size of 1.25% of paid-up equity in HZL, out of Gol's shareholding of 29.54%, was
- Due to oversubscription under Non-Retail Category, Green Shoe Option was exercised over & above the base size offer of 1.25% of paid up equity.
- 1.6168% of the total paid up equity of HZL was sold and the Gol realised an amount of Rs 3,449.18 crore through the proceeds.
LISTING OF NTPC GREEN ENERGY LTD. (NGEL):
- DIPAM, along with Ministry of New and Renewable Energy, facilitated the listing of NTPC Green Energy Ltd. (NGEL).
- NGEL is a subsidiary of NTPC and it was listed on 27.11.2024.
- Funds raised will be used by the company for undertaking investments in green energy projects.
STRATEGIC DISINVESTMENT OF FERRO SCRAP NIGAM LIMITED (FSNL)
- DIPAM invited through the Request for Proposal (RFP) on January 2, 2024; subsequently two financial bids were received by January 31, 2024, with the highest bid fixed at Rs 320 crore, surpassing the reserve price of ₹262 crore determined by expert valuation.
- The Alternative Mechanism, under the Cabinet Committee on Economic Affairs (CCEA), approved the highest bid submitted by M/s Konoike Transport Co. Ltd., amounting to ₹320 crore.
- The sale involved 100% equity in Ferro Scrap Nigam Limited (FSNL), a 100% subsidiary of MSTC Ltd., along with the transfer of management control. The transaction has moved to concluding stage.
- The transaction was finalized through the issuance of the Letter of Award, signing of the Share Purchase Agreement (SPA), and fulfillment of the conditions precedent specified in the SPA by the respective parties.
- The disinvestment process was overseen by a multi-layered consultative mechanism, involving an Inter-Ministerial Group, the Core Group of Secretaries on Disinvestment, and the Alternative Mechanism.
- FSNL, a 100% subsidiary of MSTC Ltd. under the Ministry of Steel, was incorporated on March 28, 1979. It specializes in providing steel mill services, including the recovery and processing of scrap from slag and refuse generated during iron and steelmaking at various steel plants.
HIGHER DIVIDEND PAYOUTS BY CPSEs
- Dividend Payouts by Central Public Sector Enterprises (CPSEs), exceeded the Revised Estimates (RE) of:
- 39,750 in FY 2020-21
- 59,294 in FY 2021-22
- 59,533 in FY 2022-23
- 63,749 in FY 2023-24
- During the current FY, Government has received about Rs. 25,323 crore as dividend receipts from CPSEs as on 14.10.2024. As of 5th December, 2024, the Government has realised Rs. 30,284 crore as dividend receipts from CPSEs for the current fiscal year.
- DIPAM issued Advisory regarding Consistent Dividend Policy in November 2020.
REVISED GUIDELINES ON CAPITAL RESTRUCTURING OF CPSES
- DIPAM issued Revised Guidelines on Capital Restructuring of CPSES on 18.11.2024.
- These guidelines supersede the earlier guidelines issued by the DIPAM in May, 2016.
- These Guidelines reflect the evolution in the capital market conditions, regulatory & sectoral changes, etc.
OBJECTIVES OF THE REVISED GUIDELINES:
- To enhance value of CPSE and total returns for shareholders
- To improve performance and efficiency of CPSEs by providing them more operational and financial flexibility
- Enable CPSEs to play effective role in economic growth of the country
- Enable more investors to participate in value creation by CPSES
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