New Delhi, Sept. 6: The government plans to kick off the divestment in Indian Railways by offloading up to a 25 per cent stake in Rail Vikas Nigam Ltd, a company involved in rail infrastructure and project development.
The department of investment and public asset management (Dipam) has started looking for a registrar to manage the proposed stake sale.
The deadline for submitting the applications is September 21.
"RVNL will be a test case. But a 25 per cent stake will be sold in all the five rail PSUs. This will not only ensure better revenues but also help to improve the functioning of the firms and get them more resources," official said.
The stake sale will also help the company to achieve the minimum public shareholding norm of 25 per cent for listed companies under Sebi norms.
The other four rail subsidiaries approved for divestment are Ircon International Ltd, Indian Railway Finance Corp Ltd, Indian Railway Catering and Tourism Corp Ltd (IRCTC) and RITES Ltd.
RVNL, which builds rail infrastructure projects, made a profit of Rs 287.59 crore in 2015-16, while its net worth stood at Rs 2,827.83 crore.
In April, the cabinet committee on economic affairs had approved the listing of the five PSUs through public offer of shares up to 25 per cent.
However, the actual disinvestment of each public sector unit, along with the mode of raising resources, will be decided on a case-to-case basis.
Officials said the Centre was keen to sell stakes in RVNL and RITES this fiscal. At present, the Centre owns 100 per cent stake in all the five rail PSUs.
For the current financial year, the Centre plans to raise Rs 72,500 crore through divestment in central public sector entities.
Till now, it has received Rs 9,960.12 crore from the divestment in NTPC and the stake sale in L&T through the Specified Undertaking of Unit Trust of India (SUUTI).
The stake sales will help the government to bridge the fiscal deficit estimated at 3.2 per cent of the GDP.