Centre wants profit-making subsidiaries of PSUs to go public
Whether the markets are able to decouple from bad news emanating out of Europe will be seen over the next week.
The government is mulling a proposal for encouraging profitable subsidiaries of public sector units (PSUs) to seek listing and raise funds from the capital market.
"The proposal is at conceptual stage at the moment. The Department of Disinvestment (DoD) would soon discuss the proposal with the concerned ministries to find out its feasibility," a source said.
The DoD has called a meeting, next week, to discuss the proposal with the representatives of the concerned ministries including coal and petroleum.
"The Central Public Sector Enterprises (CPSEs) operating in sectors like oil, power, coal and steel have profitable subsidiaries, which could be listed on the bourses," the source added.
The listing of subsidiaries will help in raising resources for the PSUs and paying better dividends to the government. The fund flow will encourage CPSEs to buy back their shares and promote the disinvestment programme of the government.
The government proposes to raise Rs 30,000 crore in the current fiscal from disinvestment. During 2011-12, the government raised only Rs 14,000 crore as against the target of Rs 40,000 crore.
Of the total 220 operational CPSEs, 158 units were profit-making as on March 2011.