The second wave may impact govt’s privatization drive
The second wave: The sharp flow in Covid cases in the country has cast fresh shadows of uncertainty over the government’s privatization drive and is likely that some high-profile stake sales may get delayed.
While the Centre has made privatization of state-run firms a key policy and it is seeing as a major source of much-needed funds for the government which is battling a tough situation with the spiralling of Covid cases. Experts reckon that localized lockdowns are also expected to hurt the economic recovery that is underway.
Moreover, several key stake sales are in an advancing stage Air India, BPCL, Shipping Corporation, and BEML sales are scheduling to be completed in the current financial year. However, experts say the second wave of the pandemic is likely to hamper. The process as various stakeholders may prefer to wait there are some signs of cooling down in the infection numbers.
Last year, the coronavirus outbreak had hurt roadshows for the strategic sale in Shipping Corporation and the department of investment and public asset management had held virtual meetings with investors in Hong Kong and Singapore. However, the pandemic-induced lockdowns, along with choppy markets, had an impact on the entire asset sales drive.
On the other side, the government has expressed confidence that several of the key transactions are likely to be completing. But with the government’s attention focussed on combating the fresh surge and investor mood likely to be swaying by a jump in cases, experts say, it would be a tough road ahead for privatization.
The government thinks tank NITI Aayog has approved the names for privatization of two banks, one insurance company and 7-8 other state-run companies. The proposed IPO of the country’s largest insurer LIC is also making progress.