Monday, July 4, 2016

Govt begins ITDC divestment process; to sell 12.03%

NARENDRA Modi-led NDA Government has begun the process of 12.03-percent stake sale in India Tourism Development Corporation (ITDC). The move is likely to fetch around Rs 260 crore to the exchequer.
The newly-set up Department of Investment and Public Asset Management (DIPAM), previously known as Disinvestment Department, has invited...
bids from merchant bankers to assist the government in the disinvestment process of ITDC, which runs a chain of hotels and restaurants.
"The government is considering divesting 12.03 percent paid-up equity share capital of ITDC out of its shareholding of 87.03 per cent in domestic market through offer for sale," said the tender floated by DIPAM.
The merchant bankers have to submit bids to the government by July 21.
At the current market price, the share sale could fetch about Rs 260 crore to the exchequer.
ITDC has a network of eight Ashok Group of Hotels, five JV hotels, one restaurant, 11 transport units, nine duty-free shop at airports and seaports.
In addition, the MIniratna PSU is also engaged in production, distribution and sale of tourist publicity literature and providing entertainment and duty free shopping facilities to the tourists.
ITDC, which came into existence in October 1966, has been the prime mover in the progressive development, promotion and expansion of tourism in the country, says its website.
ITDC is also managing a hotel at Bharatpur and a restaurant at Kosi on behalf of the Department of Tourism. In addition, it is also managing catering services at Western Court, Vigyan Bhawan and Hyderabad House, New Delhi.
The PSU under the Ministry of Tourism earned revenue of Rs.133.14 crore in the quarter ended March 2016, with a net profit of Rs.18.08 crore. The merchant bankers have to submit their bids to the government by July 21. The government expects to earn Rs.56,000 crore through the sale of its stake in PSUs this financial year.
ITDC disinvestment is expected to add to the disinvestment kitty of the government, which plans to mop up Rs 56,500 crore through stake sale in PSUs. Of this, Rs 36,000 crore is expected to come in from minority stake sale in PSUs and another Rs 20,500 crore from strategic stake sale in both profit- and loss-making PSUs.
So far, the govt has raised about Rs 2,700 crore from stake sale in NHPC and another Rs 240 crore through employee subscription of IOC stake sale.

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