The Central Govt. Expected to Invite Bids for SCI
The central government of India recently decided to invite financial bids for the SCI Shipping Cooperation of India by the end of May 2023. Two government sources told Reuters that this action was taken following years of delays in selling the state-run business.
The Indian government, led by PM Narendra Modi, has previously planned to privatize several state-owned businesses in the year 2019, selling its ownership part in Shipping Corp of India Ltd. However, similar initiatives have previously been stymied by regulatory hurdles.
Following a report on the Centre’s privatisation proposal, the share price of the publicly traded SCI (Shipping Cooperation of India), which is controlled by the government, increased by roughly 5% to 85.17 per share on 11th April 2023. According to Reuters, the central government will privatize the SCI at the end of May 2023, which cited two government sources.
This scheme was announced earlier in 2019, with a specific plan to privatize various PSUs and sell its investment in SCI. Regulator holdups caused it to stall.
The SCI manages the operation of crude oil tankers & Bulk carriers are just a couple of the vessels that the Shipping Corporation owns and runs. Before the Indian government could sell its holding up to 63.75% in the organization, its non-core funds had to be spun off. According to the report, the number of funds that were required to be moved to the demerged firm was the bottleneck.
On getting the regulatory permission late in the month of Feb, SCI finished the spinoff in the last month. One of the two authorities said that the government aims to immediately flog this demerged organization named SCI Land Assets Ltd, before the month of April 23.
The final decision on this plan will be of the cabinet secretary which will be made public on 14th April 2023. This panel would also be asked to explore selling the 31% stake of the government in Container Corporation of India Ltd, which was already delayed from the year 2020.
The email requesting feedback received no response from the finance ministry.