Source: Daily News and Analysis
The government has embarked on a move to partially divest stake in six public sector units, four of which are key players in defence sector.
With stock markets enjoying heightened valuations, the government is preparing to list a clutch of defence-related state-owned entities including guided missiles maker Bharat Dynamics, naval shipyards like Garden Reach Shipbuilders & Engineers and Mazagon Dock Shipbuilders, and maker of weapon-grade super alloys Mishra Dhatu Nigam.
Also on the list are MSTC, a leading player in online trading platform and Neepco, a power producer from North-East.
As the first step, the Department of Investment and Public Asset Management has written to top legal firms on Tuesday, asking them to bid for the selection of legal advisors to the initial public offer (IPO) process and has also sought response from reputed merchant bankers.
“The government intends to disinvest certain percentage of paid-up equity share capital out of its shareholding in six CPSEs viz, Bharat Dynamics, GRSE, Mazagon Dock Shipbuilders, Mishra Dhatu Nigam, Neepco and MSTC through IPO of share by promoters through stock exchange mechanism. Department of Investment and Public Asset Management requires the services of reputed law firms with experience and expertise in IPOs/FPOs in capital markets to act as legal advisor and assist government in the aforesaid IPO,” the letter written to some of the top 15 legal firms like Cyril Amarchand, Luthra & Luthra, Khaitan & Co, Shardul Amarchand, AZB & Partners among others said.
“A part of the public offering will be reserved for employees of the company. The eligible employees and retail investors will be offered shares at a discount (to be decided later) on the issue price,” the document asking for request for proposals from book running lead managers said.
Bharat Dynamics is amongst a few in the world having capabilities to produce state-of-the-art guided weapon systems.
“The company is poised to enter new avenues of manufacturing, covering a wide range of weapon systems such as surface-to-air missiles, defence systems, heavy weight torpedoes, air-to-air missiles, making it a world-class defence equipment manufacturer,” the bid document said.
Also on the list are two strategic shipyards – Kolkata based GRSE and Mumbai based Mazagon Dock.
The development comes when these two shipyards are executing construction of a secretive stealth frigates project.
Altogether, seven such stealth ships would be built in the country, including four at Mazagon and three at GRSE.
Mishra Dhatu is now working on import substitution for specialised metal and metal alloys of titanium, nickel, cobalt and iron for applications in aerospace, defence, atomic energy and power.
MTSC has been undertaking online coal-auctions and had earlier single-handedly executed all the de-allocated coal block auctions.
Neepco, which is currently executing 700 megawatt worth of projects, takes care of 40% of the energy requirement of the north-eastern region.
Bharat Dynamics, GRSE, Mazagon Dock Shipbuilders, Neepco, MSTC, Mishra Dhatu Nigam to be listed
Cyril Amarchand, Luthra & Luthra, Khaitan & Co, among 15 legal firms who have been approached
The eligible employees and retail investors will be offered shares at a discount on the issue price
A part of the public offering will be reserved for employees of the company
The move follows the recent effort initiated for divestment of Railway PSUs like IRCON International, IRFC