The government has set itself strict timelines to meet the ambitious target of raising Rs.72,500 crore in 2017-18 from stake sale in its central public sector enterprises. The Department of Investment & Public Asset Management (DIPAM), the government department entrusted with the disinvestment programme, has said the entire process of listing a public sector unit and putting it on the block would be completed within 165 days or in about 5- and-a- half months.

"We are aware of our targets. We are putting in place a revised mechanism and procedure to ensure timebound listing of identified CPSEs on stock exchanges. This is in line with the budget announcements," Neeraj Gupta, DIPAM secretary said.

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Union Finance Minister Arun Jaitley announced in his budget on 1 February that the government intends to raise Rs.72,500 crore in 2017-18 through disinvestment. Of this, Rs.46,500 crore would be raised through disinvestment, Rs.15,000 crore through strategic disinvestment and Rs.11,000 crore through the listing of insurance companies.

 The list of eligible CPSEs for listing would be ready within one month from the finalisation of audited accounts of the last financial year, based on the criteria of a positive net-worth, no accumulated losses and having earned net-profits in three preceding years, Gupta said. This will be prepared by the concerned ministry or department or DIPAM.

DIPAM is in the process of setting up an Inter-ministerial Group (IMG) to appoint advisors and intermediaries to guide the process of disinvestment through public offer. The process for the appointment of advisers, including merchant bankers and legal advisers, will be completed within eight weeks of the IMG being set up. 

The IMG will be headed by Secretary, DIPAM. The other members will include secretaries or joint secretaries of the concerned AM or AD, Department of Legal Affairs, Department of Economic Affairs,  Department of Public Enterprises, Ministry of Corporate Affairs, Financial Advisor of the concerned AM/AD and DIPAM and CMD of the concerned CPSE.

An Empowered Committee (EC) will be constituted under the secretary of the concerned administrative ministry or department, with the mandate to complete time-bound documentation of the draft red herring prospectus (DRHP). 

In cases of listing through sale of government's stake, Cabinet Committee for Economic Affairs (CCEA) approval for listing of identified CPSEs will be obtained by DIPAM. In case of issue of fresh equity in conjunction with the sale of GoI’s stake for listing, CCEA approval shall be obtained by the concerned administrative ministry or department.

The disinvestment proceeds in the current financial year are Rs.37,696.03 crore at present. The government has set a target of Rs.56,500 crore to be raised from disinvestment this fiscal.