Efforts to raise PSU valuation to raise more money

Mumbai, Ta. 21 December 2020, Monday

In order to raise huge sums of money through privatization of public sector undertakings, the government has initiated efforts to increase the valuation of such undertakings as much as possible.

To ease the pressure on the country's fiscal deficit due to Corona, the government plans to raise money through various sources, including the privatization of public sector undertakings, finance ministry sources said.

Increase the market cap of public sector companies and also pay more dividends so that it will be easier to raise more money by selling their equities from the next financial year.

In general, government undertakings are more focused on increasing production and revenue. There is no special emphasis on increasing efficiency and evaluation. As a result, the share price of such ventures is lower than the overall market.

Companies should increase their valuation and profitability amid the changing business environment. Only then will such companies get good share prices, according to a draft prepared by the government.

The government plans to raise Rs 2.5 trillion by 202 by selling its stake in public sector undertakings such as ONGC, IOC and BEML, sources said.

The government has started taking steps to sell stakes in some companies. The government has managed to raise only 10 per cent against the target of Rs 1.50 trillion in the current financial year.