20 years later: India’s CPSE privatisation off to ‘Maharaja’ start

With the new owner shelling out Rs 18,000 crore for the buyout of ‘Maharaja’ this would be the highest ever amount garnered through privatisation or even the cumulative sum garnered through strategic sale in 1999-00 to 2003-04.

The government had garnered roughly over Rs 5,000 crore during that five-year period by privatising 10 CPSEs. Besides, three hotel properties of Hotel Corporation of India and 18 of ITDC were also sold off by way of slump sale.

Here is a timeline of strategic sale of central public sector enterprises (CPSEs) to private entities between 1999-00 to 2003-04.


1999-00 – Modern Food Industries Ltd — Rs 105 cr

2000-01 – BALCO , Lagan Jute Machinery Co Ltd — Rs 554 cr

2001-02 — VSNL, Computer Maintenance Corporation (CMC), Hindustan Teleprinters Ltd (HTL), Paradeep Phosphate Ltd (PPL), some hotel properties of HCI and ITDC — Rs 2,089 crore

2002-03– Hindustan Zinc Ltd (HZL), Indian Petrochemicals Corporation (IPCL), some ITDC hotel properties — Rs 2,335 cr

2003-04 — HZL, Jessop & Co — Rs 342 cr

The government has also sold its majority stake in certain CPSEs to public sector companies operating in the similar sector.

These include sale of 74 per cent government stake in Indo Burma Petroleum Co (IBP) to Indian Oil Corp (IOC) in 2001-02 for Rs 1,153 crore and Oil and Natural Gas Corp (ONGC) buying out government stake in Hindustan Petroleum Corp Ltd (HPCL) for Rs 36,915 crore in 2018.

Besides, government’s 52.63 per cent stake in REC was sold to Power Finance Corp for Rs 14,500 crore in 2018-19.

Between 2000-01 and 2019-20, the government has sold its entire stake in nine CPSEs to other similarly placed public sector enterprises garnering cumulative Rs 53,450 crore.

The privatisation process witnessed stagnation post 2004 as the focus shifted to selling minority stake in CPSEs through follow on public offer (FPO) and offer for sale (OFS) and also stock exchange listing of profitable CPSEs.

In the 2021-22 Budget, the Government announced the PSE (public sector enterprises) privatisation policy as per which all PSUs will be privatised, barring four strategic sectors of Atomic energy, Space and Defence; Transport and Telecommunications; Power, Petroleum, Coal and other minerals; and Banking, Insurance and financial services. In these strategic sectors, the government will retain only a bare minimum number of PSUs.

In her Budget speech, Finance Minister Nirmala Sitharaman said strategic disinvestment of BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam Ltd, among others, and IPO of LIC would be completed in 2021-22.

Besides, two public sector banks and one general insurance company too would be privatised as per the privatisation agenda.

The Budget for 2021-22 has set a disinvestment target of Rs 1.75 lakh crore, higher than Rs 32,000 crore estimated to be garnered in the last fiscal. Of the Rs 1.75 lakh crore, Rs 1 lakh crore is to come from selling government stake in public sector banks and financial institutions. Rs 75,000 crore would come as CPSE disinvestment receipts.

So far, Rs 9,110 crore has been raised through sale of minority stake in Axis Bank, NMDC Ltd, Housing and Urban Development Corp (HUDCO) and Hindustan Copper.