Indian Railways picks SBI Caps to pitch for listing of 3 PSUs
In a bid to list its public sector undertakings (PSUs) on stock exchanges, Indian Railways has asked SBI Capital Markets Ltd, a wholly-owned subsidiary of State Bank of India, to conduct a study.
Among the key announcements on Indian Railways in Union Budget 2017-18, the National Democratic Alliance (NDA) government proposed to list three of its PSUs — Indian Railway Catering and Tourism Corporation Ltd (IRCTC), Indian Railway Finance Corporation Ltd (IRFC) and Ircon International Ltd — on stock exchanges.
“It will take us two to three months to draft a plan. SBI Caps will conduct a study and give it to the board within a period of 15-30 days,” a senior official in ministry of railways said requesting anonymity.
In his Budget 2017-18 speech, finance minister Arun Jaitley had said that listing of public sector enterprises will foster greater public accountability and unlock the true value of these companies. “The government will put in place a revised mechanism and procedure to ensure time-bound listing of identified Central Public Sector Enterprises (CPSEs) on stock exchanges. The disinvestment policy announced by me in the last Budget will continue,” Jaitley said.
In addition, the government decided to waive off the service charge on e-tickets booked through IRCTC. The PSU had already asked the ministry for compensation of losses incurred due to service charge waiver post demonetisation, as reported by InfraCircle on 13 January.
IRCTC earned Rs.551 crore as service charge in 2015-16. This comes in the backdrop of the national carrier’s plans of forming an umbrella holding company for its PSUs, which was part of the Budget announcements for the current financial year.
“The Cabinet note for forming the holding company has been sent. We did not receive much favour from other ministries when the draft had gone for inter-ministerial comments,” the official quoted above said.
The national carrier has 16 PSUs and other organisations functioning under the ministry of railways.
According to another official, who also requested anonymity, the rationale behind forming a holding company was directing the proceedings from the subsidiaries to the holding company which, under present structure, go to the ministry of finance.
“If we divest, what happens is that the proceedings go to the finance ministry, they don’t remain with the ministry of railways. If we were to form a holding company of the PSUs, once the subsidiaries get divested, the proceeds will go to the holding company,” the second official said.
Queries mailed to spokespersons of SBI Capital and the ministry of railways on 15 February remained unanswered.
Liked the story? Subscribe to our daily and weekly newsletter, InfraReads, to keep track of India's infrastructure space.