Sale of ‘enemy shares’ and stock buyback by CPSEs adds Rs.11,300 crore to exchequer


The government announced the sale of ‘enemy shares’ and the buyback of shares by Central Public Sector Enterprises (CPSEs). The two transactions added Rs.11,300 crore to the central exchequer. Further, the move aided in clearing up disinvestment of Rs.85,000 crore in FY 2018-19. 

This is the first time the government decided to sell enemy shares and the cabinet permitted the same in November 2018.

In a first, the Department of Investment and Public Asset Management (DIPAM) sold ‘enemy shares’ valued at Rs.700 crore from companies that held such shares. The cabinet had permitted the DIPAM sale of such assets in November 2018. ‘Enemy shares’ are basically properties that were owned by former Indian citizens who are now immigrants in Pakistan or China.  

The amount that was collected by the government through the buyback of stocks by CPSEs is estimated at Rs.10,600 crore. ONGC, Coal India, IOC, NLC, and Oil India are the companies which bought back the shares held by the government. 

The highest amount yielded by the government this fiscal was through the Exchange Traded Funds (ETFs) share sale which came up to Rs.45,729 crore. The Power Finance Corporation’s acquisition of a 52.63 per cent stake in the Rural Electrification Corporation (REC) yielded Rs.14,500 crore. The government made Rs.5,218 crore through offer for sale of Coal India and Rs.1,929 crore through initial public offerings of certain companies. Also, the government received Rs.5,379 crore by selling the stake held through SUUTI in Axis bank. 

The government has set the target for disinvestment at Rs.90,000 crore for the next fiscal.

Source: Money Control


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